Which of the following statements are correct regarding the quick ratio? (Check all that apply.)
- The quick ratio provides the same information as the current ratio.
- A quick ratio of less than 1.0 would indicate that a business's debt can be easily paid off with current assets.
- A quick ratio of less than 1.0 could indicate that a company may have a problem paying off short term debt.
- A favourable quick ratio falls between 1.5 and 2.0 .
- The quick ratio is a more robust measure of liquidity because it excludes the less liquid assets such as inventory and prepaid assets.
- The quick ratio is one measure of a company's ability to pay its short-term debts.