CFA Practice Question
The quick ratio is also called the ______.
B. acid-test ratio
C. cash-flow liquidity ratio
A. current ratio
B. acid-test ratio
C. cash-flow liquidity ratio
Correct Answer: B
The quick ratio is also called the acid-test ratio because it provides a more rigorous test of short-term liquidity than does the current ratio.
User Contributed Comments 1
| User | Comment |
|---|---|
| microeconomist | To gauge short-term liquidity, the Quick Ratio excludes inventory. |