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      Question

      For knowing the cash (liquidity) position of a company

      which of the ratio will be used?ย  ย 
      A Debt Equity Ratio Correct Answer Incorrect Answer
      B Liquid Ratio Correct Answer Incorrect Answer
      C Capital Ratio Correct Answer Incorrect Answer
      D Quick Ratio Correct Answer Incorrect Answer
      E Fast Ratio Correct Answer Incorrect Answer

      Solution

      The quick ratio is a measure of how well a company can meet its short-term financial liabilities. Also known as the acid-test ratio, it can be calculated as follows: (Cash + Marketable Securities + Accounts Receivable) / Current Liabilities.

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