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Options
- A
Current Ratio
-
Acid-Test Ratio
Correct answer
- C
Debt-Equity Ratio
- D
Cash Ratio
Why this is the answer
The Quick Ratio (Acid-Test Ratio) measures a company’s ability to meet short-term liabilities using its most liquid assets (excluding inventory). Current Ratio includes inventory, while Debt-Equity and Cash Ratios measure other aspects of financial stability. The Quick Ratio provides a more stringent test of liquidity.
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