You are an accountant at company XYZ. You are asked to perform an acid test to measure the​ company's short-term liquidity. By looking at financial​ statements, you see that the company has a cash balance of​ $100,000, $30,000 in marketable​ securities, $50,000 in​ receivables, inventory of​ $20,000, and liabilities totaling​ $40,000. Taking into account this​ information, what is the acid test​ ratio?

You are an accountant at company XYZ. You are asked to perform an acid test to measure the​ company's short-term liquidity. By looking at financial​ statements, you see that the company has a cash balance of​ $100,000, $30,000 in marketable​ securities, $50,000 in​ receivables, inventory of​ $20,000, and liabilities totaling​ $40,000. Taking into account this​ information, what is the acid test​ ratio?

You are an accountant at company XYZ. You are asked to perform an acid test to measure the​ company's short-term liquidity. By looking at financial​ statements, you see that the company has a cash balance of​ $100,000, $30,000 in marketable​ securities, $50,000 in​ receivables, inventory of​ $20,000, and liabilities totaling​ $40,000. Taking into account this​ information, what is the acid test​ ratio?



A. 4.0

B. ​220,000

C. 2.5

D. 5.0

E. 11.0



Answer: A. 4.0


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