Question: Analysts use the quick ratio (also known as the acid test ratio) and the current ratio. The use of both ratios has become common because

Analysts use the quick ratio (also known as the acid test ratio) and the current ratio. The use of both ratios has become common because

the quick ratio is much easier to compute than the current ratio.

interpretation of the current ratio is more difficult because of its complexity.

the acid test is a more severe test of a company's liquidity.

the acid test a better measure of management's effectiveness.

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