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Basic Question 14 of 23
The quick ratio ______
II. calculation includes inventory.
III. is used to evaluate profitability.
I. is a measure of short-term debt-paying ability.
II. calculation includes inventory.
III. is used to evaluate profitability.
User Contributed Comments 2
| User | Comment |
|---|---|
| fabsan | The denominator of the Quick ratio is = Tot Short Term Liabilities (not the debt). |
| maryprz14 | It is a measure of short-term liability paying ability, not debt. Debt is long term and bears interest, short-term liability does not bear interest so is not DEBT. |
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Learning Outcome Statements
explain liquidity and compare issuers' liquidity levels
CFA® 2025 Level I Curriculum, Volume 2, Module 4.