Answer to Question #100076 in Accounting for carol

Question

Assuming the quick ratio for a competitor of Queen Company for 2018 is 1.90, comment on
Queen Company’s quick ratio.

Answer 1

The quick ratio is an indicator of a company’s short-term liquidity position and measures a company’s ability to meet its short-term obligations with its most liquid assets. It compares the total amount of cash and cash equivalents + marketable securities + accounts receivable to the amount of current liabilities.

If the quick ratio for a competitor of Queen Company for 2018 is 1.90, then it has good position and can cover all its liabilities.