A stricter test strips inventory and prepaid expenses out of current a…

Question

A stricter test strips inventory and prepaid expenses out of current assets. That test is also called the:

Accepted Answer

B. Acid-test ratio

1. Only the most liquid assets count.
2. Inventory is excluded.
3. It is the acid-test, or quick, ratio.
_Source: OpenStax Principles of Finance 2e, Chapter 6, Measures of Financial Health._

Answer

Book value ratio

Answer

Debt-to-assets ratio

Answer

Times interest ratio

A stricter test strips inventory and prepaid expenses out of current assets. That test is also called the:

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