The formula to calculate the Quick Ratio (Acid-Test Ratio) is:
\[ \text{Quick Ratio} = \frac{\text{Cash and Cash Equivalents} + \text{Marketable Securities} + \text{Accounts Receivable}}{\text{Current Liabilities}} \]
The quick ratio (acid-test ratio) is a financial metric used to measure a company's ability to meet its short-term obligations using its most liquid assets. It indicates whether a company has enough resources to pay off its current liabilities without needing to sell inventory.
Let's assume the following:
Step 1: Calculate the quick ratio:
\[ \text{Quick Ratio} = \frac{50,000 + 30,000 + 40,000}{80,000} = \frac{120,000}{80,000} = 1.5 \]
Therefore, the Quick Ratio is 1.5.
