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March 28, 2017

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quick ratio that is much smaller than the current ratio reflects
A. a small portion of current assets is in inventory.
B. that the firm will have a high inventory turnover.
C. that the firm will have a high return on assets.
D. a large portion of current assets is in inventory.

  • Financing - ,

    Look up the definitions of "quick ratio" and "current ratio". What is the difference?

    The major difference in most companies will be the size of inventory as a current asset.

    The quick ratio will always be smaller than the current ratio.

    From that, you can just read off the answer.

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