Business Ratios Question: Download Questions PDF
How to illustrate the difference between the current ratio and the acid test ratio?
Answer:
To illustrate the difference between the current ratio and the acid test ratio, let's assume that a company has current liabilities of $50,000 and has the following current assets:
★ Cash and cash equivalents $5,000
★ Short-term marketable securities $10,000
★ Accounts receivable, net $25,000
★ Inventory $56,000
★ Prepaid expenses $4,000
★ Cash and cash equivalents $5,000
★ Short-term marketable securities $10,000
★ Accounts receivable, net $25,000
★ Inventory $56,000
★ Prepaid expenses $4,000
Download Business Ratios Interview Questions And Answers
PDF
Previous Question | Next Question |
Can you please explain the difference between current ratio and the acid test ratio? | What is working capital? |