a-company-has-40000-in-cash-15000-in-short-term-investments-and-25000-in-account

Question

A company has $40,000 in cash, $15,000 in short-term investments, and $25,000 in accounts receivable. Its current liabilities are $70,000. Can the company cover its current liabilities with its quick assets?

Accepted Answer

Yes, the quick ratio is above 1, indicating sufficient liquidity.

Answer

No, the quick ratio is below 1, indicating insufficient liquidity.

Answer

Yes, but only if the company sells its inventory.

Answer

No, the company needs to increase its cash reserves.

A company has \$40,000 in cash, \$15,000 in short-term investments, and \$25,000 in accounts receivable. Its current liabilities are \$70,000. Can the company cover its current liabilities with its quick assets?