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    Question

    Which ratio measures a company’s ability to meet

    short-term obligations excluding inventory?
    A Current ratio Correct Answer Incorrect Answer
    B Debt-equity ratio Correct Answer Incorrect Answer
    C Quick (acid-test) ratio Correct Answer Incorrect Answer
    D Return on capital employed Correct Answer Incorrect Answer
    E Inventory turnover ratio Correct Answer Incorrect Answer

    Solution

    Quick ratio = (Current assets − Inventory)/Current liabilities; excludes inventory.

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