Posted by Jim on .
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.
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.