Question
Financial statement analysts among others compute ratios to gauge how the company is performing. One such ratio is the Acid-test(or Quick) Ratio. Provide the formula
Financial statement analysts among others compute ratios to gauge how the company is performing. One such ratio is the Acid-test(or Quick) Ratio.
Provide the formula for the Acid-test ratio and explain why inventories and prepaid expense are excluded from this calculation.
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Accounting Tools for business decision making
Authors: kimmel, weygandt, kieso
4th Edition
978-0470117262, 9780470534786, 470117265, 470534788, 978-0470095461
