medium · Financial Accounting financial-statement-analysis-ratios
A company has a Current Ratio of 1.8 and a Quick Ratio of 0.9.
Which of the following is the most likely explanation for the difference between these two ratios?
- The company has high levels of accounts receivable
- The company has a large amount of long-term debt
- The company has very little cash on hand
- The company carries a significant amount of inventory
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