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
Sign up free to see the explanation and track your rank →
More Financial Accounting financial-statement-analysis-ratios practice
- What is the debt-to-equity (D/E) ratio?
- What is the total number of days in the cycle?
- What is the Quick Ratio (Acid-Test Ratio)?
- If it uses $50,000 of cash to pay off an account payable, what is the new current ratio?
- An analyst calculates the Cash Conversion Cycle. If Days Inventory Outstanding (DIO) is 40
- If a firm's Debt-to-Equity ratio is $1.5 and its Total Equity is $200,000, what are its To
- Using the DuPont decomposition, what is the Asset Turnover component?
- Using a 365-day year, what is the Cash Conversion Cycle (CCC)?