- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 16. Credit Analysis for Corporate Issuers
- Subject 2. Financial Ratios in Corporate Credit Analysis
CFA Practice Question
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.
Correct Answer: I only
The quick ratio is used to evaluate liquidity. Only current assets that can be quickly converted to cash are included in the quick ratio, so inventory is not included in the calculation.
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