The initial analysis should include the following:The ratio equationThe calculation of the ratio using the equation and the pre-assigned Quick Study or Exercise from the textbook. Use the result in a sentence; i.e. For every dollar invested in assets the company is earning 22.4 cents or 22.4% in net income. Then explain whether this is a good result or a result that needs improving.Use citations to cite any outside sources used.The original post should include at least three (3) sentences but no more than seven (7) sentences. **QS 5-14 Computing and Interpreting Acid-Test Ratio**Use the following information on current assets and current liabilities to compute and interpret the acid-test ratio. Explain what the acid-test ratio of a company measures.| **Current Assets** | | **Current Liabilities** | ||--------------------------|--------------|------------------------------|--------------|| Cash | $1,490 | Accounts payable | $5,750 || Accounts receivable | $2,800 | Other current liabilities | $850 || Inventory | $6,000 | | || Prepaid expenses | $700 | | |The acid-test ratio, also known as the quick ratio, is a measure of a company's short-term liquidity, calculated by using its most liquid assets. The formula for the acid-test ratio is:\[\text{Acid-Test Ratio} = \frac{\text{Cash} + \text{Accounts Receivable}}{\text{Accounts Payable} + \text{Other Current Liabilities}}\]This ratio indicates whether a company has enough quick assets to cover its short-term liabilities without selling inventory.

Name: The initial analysis should include the following:The ratio equationTh
Uploaded: 2022-11-18T00:26:54.000Z
Channel: Bartleby
Description: The initial analysis should include the following:The ratio equationThe calculation of the ratio using the equation and the pre-assigned Quick Study or Exercise from the textbook. Use the result in a sentence; i.e. For every dollar invested in assets