In accounting, the acid-test ratio, or quick ratio, is one way to measure a company's liquidity, or how well
equipped it is to pay off debts in cash.
ca-i-p
the quick ratio, q. is calculated using the formula q = - - where c a is the value of the
company's current assets. i is inventory, p is prepaid expenses, and cl is current liabilities.
rearrange the formula to solve for current assets (ca).
ca=
what is the value of a company's current assets if the company has $5500 in inventory, $1500 in prepaid
expenses, $8000 in current liabilities and a quick ratio of 0.72
round your answer, if necessary, to the nearest dollar.
ca=
dollars
1/4
first, let's eliminate the fraction by multiplying both sides of the equation by cl.