A company has a current ratio of 1.25 but an acid-test (or quick) ratio of only 0.65.

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A company has a current ratio of 1.25 but an acid-test (or quick) ratio of only 0.65. How can this difference in the two ratios be explained? What concerns might you have about this company?

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Using Financial Accounting Information The Alternative to Debits and Credits

ISBN: 978-1133161646

7th Edition

Authors: Gary A. Porter, Curtis L. Norton

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Question Posted: Jan 12, 2012 02:09 AM

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A company has a current ratio of 1.25 but an acid-test (or quick) ratio of only 0.65.

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A relatively low acidtest or quick ratio compared with the ...View the full answer

Using Financial Accounting Information The Alternative to Debits and Credits

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