In this chapter, we said that the quick ratio is a better measure of liquidity than the

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In this chapter, we said that the quick ratio is a better measure of liquidity than the current ratio because the quick ratio includes only those current assets that may be easily converted to cash.

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What is the quick ratio? What current assets do we include in the calculation? Do you think this is the best possible measure of liquidity? Outline reasons for your answer and suggest alternatives if appropriate.

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