Liquid ratio is also known as. (a) Current ratio (b) Quick ratio (c) Capital ratio (d) None of these
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your answer is quick ratio
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The answer for the following question is given below.
Explanation:
The quick ratio is also considered as a Liquid ratio.
In quick ratio, we get a relation between quick assets and current liabilities, when we subtract Inventory and prepaid expenses from current assets we get quick assets or liquid assets.
Quick assets = (Current assets - Inventories - Prepaid expenses) / Current liabilities.
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