Series 7 - General Securities Representative Exam

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QRST corp has $420,000 on hand, $168,000 in marketable securities, $315,000 in accounts receivables , $212,000 in current liabilities and $635,000 in inventories. What is QRST's quick ratio?

1.87
A
4.42
B
1.76
C
4.26
D

Explanations

Remember the acid test or quick ratio formula. Cash+Marketable Securities + Accounts Receivables / Current Liabilities. Inventories are not used in the quick ratio. The answer is 4.26

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