CHAPTER 18 – Understanding Financial Information and ...

a. current ratio. b. quick ratio. 38. Current ratio = Current assets. Current liabilities . 39. Acid test ratio = Cash + marketable securities + receivables. Current liabilities 40. The acid test ratio can help answer these questions: a. What if sales drop off and we can’t sell our inventory? b. Can we still pay our short term debt? 41. ................
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