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2. A firm has a lower quick (or acid test) ratio than the industry average, which implies?

A. the firm has a lower P/E ratio than other firms in the industry. B. the firm is less likely to avoid insolvency in short run than other firms in the industry. C. the firm may be more profitable than other firms in the industry. D. A and B.

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Question added by Muhammad Fiaz , GROUP MANAGER ACCOUNTS, FINANCE AND TAX , SMPL Group of Companies
Date Posted: 2014/06/24
Mir Mujtaba Ali
by Mir Mujtaba Ali , Internal Audit Manager , Confidential

Option B is the right answer

the firm is less likely to avoid insolvency in short run than other firms in the industry

Somnath Sarkar
by Somnath Sarkar , Finance Manager , ConvaTec India Pvt Ltd

The Answer is D

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