1. Which of the following statements most accurately describes the quick (acid-test) ratio?

1. An assessment of short-term liquidity that compares inventory, receivables and cash to current liabilities.
2. An assessment of long-term solvency which compares total assets to total liabilities.
3. An assessment of short-term liquidity which compares receivables and cash to current liabilities, without taking into account the inventories.
4. An assessment of long-term solvency which compares short and long-term borrowings to total equity.

Answer rating: 100% (QA)

ANSWER D An assessment of longterm solvency which compares short and longterm borrowings to total eq... View the full answer