Running Head: QUICK RATIO1Quick RatioInstitution AffiliationDate:QUICK RATIO2Large companies such as the Amazon and Alibaba use the quick ratio to gauge theirliquidity. To be able to evaluate the quick ratio the standards required by companies are toevaluate all their current assets and liabilities. From these liabilities and assets is where the ratiois evaluated to determine the ability of a company in paying its current liabilities. Quick ratiorefers to a companys indicator of its short term liquidity (Brigham, 2016). It is calculated bytaking the ratio between the current assets and current liabilities with the omission of theinventories. Inventories are excluded in evaluation of the ratio since they are considered to takemore time to be converted into ash. This is the main difference between the quick ratio and thestandards. The difference between the standard ...
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