w-Exam 2 Extra Credit (1) KLM Corporation's quick assets are 5,920,000 its current assets are 11,700,000 and its current liabilities are 8,000,000 Its acid-test ratio equals Multiple Choice 0.51 0.68

The acid-test ratio or quick ratio is a kind of liquidity ratio that measures how a company can pay off its current liabilities with its quick assets (usually cash, marketable securities and accounts receivable). Quick Assets do not include inventory and prepaid expenses as they are hard to convert into cash on very short notice. We can calculate the acid-test ratio by using the formula: Quick assets / Current liabilitiesGiven the following:Quick Assets = 11,700,000 Current Liabilities = \frac{5,920,000}{8,000,000}$