The current ratio and quick ratio. Introduction: The quick ratio and current ratio are liquidity ratios. The current ratio measures a company’s capability for the payment of short-term and long-term obligations. The measurement of short-term financial liabilities is made by the quick ratio . The quick ratio is also known as the acid-test ratio.

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Chapter 3, Problem 1QP

Summary Introduction

To compute: The current ratio and quick ratio.

Introduction:

The quick ratio and current ratio are liquidity ratios. The current ratio measures a company’s capability for the payment of short-term and long-term obligations. The measurement of short-term financial liabilities is made by the quick ratio. The quick ratio is also known as the acid-test ratio.

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