ACtE09 · Chapter 9Basic Electrical & Electronics🏛️ Past Licensure QuestionID: 58cdfd76
In financial management and corporate liquidity analysis, the ratio obtained by dividing quick assets (current assets excluding inventory) by current liabilities is called the:
In financial management and corporate liquidity analysis, the ratio obtained by dividing quick assets (current assets excluding inventory) by current liabilities is called the:
Multiple Choice Options
- A
Turnover ratio
- B✓ Correct Option
Acid test ratio (Quick ratio)
- C
Solvency ratio
- D
Debt-to-equity ratio
Detailed Technical Solution & Explanation
The Acid Test Ratio (Quick Ratio) measures a firm's immediate short-term liquidity:
Option Analysis:
•
Option A (Turnover ratio): Measures efficiency of asset utilization.
•
Option B (Acid test ratio): Correct; quick assets divided by current liabilities.
•
Option C (Solvency ratio): Measures long-term debt-paying ability.
•
Option D (Debt-to-equity): Total debt divided by equity.
Reference: Mock Test 04NEC Licensure Syllabus