CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

A company's quick ratio ______
A. can never be larger than its current ratio at the same date.
B. indicates the length of time the company takes to pay its short-term creditors.
C. indicates how quickly the company converts its current assets to cash.

User Contributed Comments 4

User Comment
CoffeeGirl current ratio = current asset / current liabilities
quick ratio = (cash + marketable securities + A/R ) / current liabilities.

so, Quick ratio is always < current ratio
pochuevalex to Coffee Girl:
I would say quick ratio <= current ratio
Saibot Yes, pochuevalex, the same only if there is no inventory
rjdelong Saibot: so Current Ratio includes INV (goods) but Quick only counts $$: money due to receive (AR) + currently held (CASH / MS)
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