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Q. Show the Quick ratio or acid test?
Quick ratio or acid test
Quick ratio = Current assets less inventories / Current liabilities (times)
This ratio measures the immediate solvency of a business as it removes the inventories out of the equation, which is the item least representing cash, as it needs to be sold. Normal is around 1: 1 however this varies within different industries.
During early 1981 People Express (PX) became one of the ?rst new entries into the deregulated interstate airline industry. PX's entry strategy was to offer a uniform low-price, no
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