Homework Answers
The quick ratio is computed as shown below:
= ( Average current assets - Average inventory ) / Average current liabilities
Average current assets
= ( $ 200,000 + $ 300,000 ) / 2
= $ 250,000
Average inventory
= ( $ 80,000 + $ 100,000 ) / 2
= $ 90,000
Average current liabilities = $ 150,000
Plugging these values in the above mentioned formula, we shall get:
= ( $ 250,000 - $ 90,000 ) / $ 150,000
= 1.067 Approximately
So the correct answer is option of 1.067
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