Question

Val's Video Store has current cash in the amount of $3,325, accounts receivable of $9,250, and current liabilities of $6,532. Find the quick ratio.1.51.71.92.2None of these choices are correct.

Answer 1

`\text{Quick ratio (Q.R)=}\frac{(cash+account\text{ receivable)}}{current\text{ liabilities}}`

Given that,

Cash=$3,325

Account receivable=$9,250

Current liabilities=$6,532

Therefore we will have that

`\begin{gathered} \text{Quick ratio=}((3,325+9,250))/(6,532) \\ \text{Quick ratio (Q.R)=}(12,575)/(6,532) \\ \text{Quick ratio(Q.R)=1.9}25\text{ }\approx1.9 \\ \end{gathered}`

Therefore,

The quick ratio =1.9

The correct option will be OPTION C