Question: The quick (or acid test) ratio is frequently used to assess the short-term debt-paying ability of a business enterprise. As a rule of thumb, U.S.

The quick (or acid test) ratio is frequently used to assess the short-term debt-paying ability of a business enterprise. As a rule of thumb, U.S. commercial lenders often consider a ratio of at least 1 to 1 to be satisfactory. Why might it be inappropriate to apply this standard when evaluating the liquidity of a non-U.S. company?

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