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30 March, 12:12

Leon is the owner of a corner store. Which ratio should he compute if he wants to know how long the store can pay its bills given its current level of cash and accounts receivable? Assume all receivables are collectible when due.

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  1. 30 March, 12:30
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    Quick ratio

    Explanation:

    The quick ratio is referred to as the ratio that is used to evaluate company liquidity. Another term used for the Quick ratio is the acid test ratio.

    It is measure of company capacity or position to full fill short term liabilities with all liquid assets.

    The quick ratio is determined by adding all the cash received from any source (cash, cash equivalent, investment, etc) by all liabilities that the company has
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