Question

Quick Ratio falls under the group of ______.

विकल्प

• Liquidity Ratios

• Solvency Ratios

• Activity Ratios

• Profitability Ratios

Answer 1

Quick Ratio falls under the group of Liquidity Ratios.

Explanation:

Liquidity Ratios measure a company’s ability to fulfil its short-term financial obligations as and when they fall due.

The Quick Ratio (also known as the Acid-Test or Liquid Ratio) falls under this group because it refines the analysis by measuring the company’s ability to pay current liabilities immediately using its most liquid assets (excluding Inventory and Prepaid Expenses, which take time to convert into cash).