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A satisfactory benchmark for the Acid-Test (Quick) Ratio is:
A0.5:1
B1:1
C2:1
D3:1
Answer & Solution
Correct answer: B. 1:1
1. Quick Ratio benchmark is 1:1.
2. Indicates the firm can meet short-term obligations from quick assets.
3. Lower acceptable than current ratio because inventories removed.
_Source: ICAI BoS CA Inter Paper 6A, Ch 3 "Financial Analysis and Planning — Ratio Analysis", §3.1(b)_
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