accounts payable 40000 accounts receivable 65000 accrued lia

accounts payable 40000
accounts receivable 65000
accrued liabilities 7000
cash 30000
intangible assets 40000
inventory 72000
long term liabilities 75000
marketable securities 36000
notes payable short term 30000
property plant and equipment 625000
prepaid expense 2000
based on the above data what is the quick ratio rounded to one decimal point?

Solution

Total current assets=(AR+Cash+Inventory+marketable securities+prepaid expenses)

=(65000+30000+72000+36000+2000)=$205,000

Total current liabiilties=(AP+Accrued liabilities+Notes payable)

=(40,000+7000+30,000)=$77000

Hence quick ratio=(Current assets-inventory-prepaid expenses)/Current liabiltiies

=(205,000-72000-2000)/77000

=131000/77000

=1.7(Approx).