{"id":59267,"date":"2024-04-16T01:34:10","date_gmt":"2024-04-16T01:34:10","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=59267"},"modified":"2024-04-16T01:34:10","modified_gmt":"2024-04-16T01:34:10","slug":"what-is-the-ideal-quick-ratio","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/what-is-the-ideal-quick-ratio\/","title":{"rendered":"What is the ideal quick ratio?"},"content":{"rendered":"

[amp_mcq option1=”01:01″ option2=”02:01″ option3=”03:01″ option4=”04:01″ correct=”option1″]<\/p>\n

The quick ratio is a liquidity ratio that measures a company’s ability to pay off its short-term obligations with its most liquid assets. It is calculated by dividing a company’s current assets minus inventory by its current liabilities.<\/p>\n

A quick ratio of 1:1 means that a company has enough liquid assets to cover its current liabilities. A higher quick ratio indicates that a company has more liquidity and is less likely to default on its debts. A lower quick ratio indicates that a company has less liquidity and is more likely to default on its debts.<\/p>\n

The ideal quick ratio is generally considered to be 2:1. This means that a company has enough liquid assets to cover its current liabilities twice over. However, the ideal quick ratio may vary depending on the industry and the company’s specific circumstances.<\/p>\n

Option A: 1:1 is a relatively low quick ratio. This means that the company has less liquidity and is more likely to default on its debts.<\/p>\n

Option B: 2:1 is a good quick ratio. This means that the company has enough liquidity to cover its current liabilities twice over.<\/p>\n

Option C: 3:1 is a high quick ratio. This means that the company has more liquidity than it needs and may be holding on to too much cash.<\/p>\n

Option D: 4:1 is an extremely high quick ratio. This means that the company has a lot of liquidity and is unlikely to default on its debts. However, it may also be holding on to too much cash.<\/p>\n

In conclusion, the ideal quick ratio is generally considered to be 2:1. However, the ideal quick ratio may vary depending on the industry and the company’s specific circumstances.<\/p>\n","protected":false},"excerpt":{"rendered":"

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