Question

The current assets of Global Acorn are valued at 25 million dollars and its current liabilities are at 6 million dollars. If its inventory is worth 1 million dollars, what is its quick ratio

Answer 1

4

Step-by-step explanation:

Calculation for quick ratio

Using this formula

Quick ratio = (Current Assets – Inventories ) / Current Liabilities

Let plug in the formula

Quick ratio= $25Million -$1million/$6 million

Quick ratio=$24 Million/$6million

Quick ratio=4

Therefore the quick ratio will be 4