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The current and quick ratios both help us measure a firm's liquidity. The current ratio measures the relationship of the firm's current assets to its current liabilities, while the quick ratio measures the firm's ability to pay off short-term obligations without relying on the sale of inventories.
A) True
B) False

Respuesta :

Answer: A. True

Explanation:

Current ratio = current assets / current liabilities

Quick ratio = (Cash + Receivables + Marketable securities) ÷ current liabilities

In the calculation of the quick ratio, inventory is excluded.

The current and quick ratios are liquidity ratios. Liquidity ratios measures a firm's ability to meet its short term obligations.

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