The quick ratio is defined as (cash + short term investments + accounts receivable) / current...

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The quick ratio is defined as (cash + short term investments + accounts receivable) / current liabilities. The purpose of this is to measure the company's ability to pay off debt that is coming due. Discuss one reason that this may not be an effective measure of a company's ability to pay off it's current liabilities within a year. There are probably several reasons that could be mentioned. Try to stick to one reason, and give a good explanation of it. Read what other students have posted, and try to mention a reason that was not previously mentioned. If that is not possible, give further explanation about a reason that was already mentioned. The quick ratio is defined as (cash + short term investments + accounts receivable) / current liabilities. The purpose of this is to measure the company's ability to pay off debt that is coming due. Discuss one reason that this may not be an effective measure of a company's ability to pay off it's current liabilities within a year. There are probably several reasons that could be mentioned. Try to stick to one reason, and give a good explanation of it. Read what other students have posted, and try to mention a reason that was not previously mentioned. If that is not possible, give further explanation about a reason that was already mentioned.