- CFA Exams
- CFA Level I Exam
- Study Session 7. Financial Reporting and Analysis (2)
- Reading 22. Understanding Balance Sheets
- Subject 5. Uses and Analysis of the Balance Sheet
CFA Practice Question
The main difference between the current ratio and the quick ratio is that the quick ratio excludes ______.
A. inventory
B. sales
C. assets
Explanation: Current ratio = current assets/current liabilities = [cash + marketable securities + receivables + inventory]/ current liabilities
Quick ratio = [cash + marketable securities + receivables]/current liabilities
Quick ratio = [cash + marketable securities + receivables]/current liabilities
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