A company’s quick ratio is 0.8. What does this indicate about its liquidity?
一家公司的速动比率是 0.8。这对其流动性有何指示？

Question

BlackTom AI · Accepted Answer

The problem presents a quick ratio of 0.8 and asks what this implies about liquidity. 
Option 1: 'The company’s liquid assets exceed its current liabilities, indicating excess cash.' This statement is incorrect because a quick ratio below 1 means liquid assets (cash, marketable securities, and accounts receivable) do not exceed current liabilities, so there is no excess of liquid assets. 
Option 2: 'The company has strong liquidity and can easily cover short-term obligations without relying on inventory.' A quick ratio of 0.8 does not demonstrate strong liquidity; it suggests the company may have difficulty covering immediate obligations without selling inventory or obtaining additional financing. 
Option 3: 'The company’s current ratio is also guaranteed to be below 1, showing overall poor financial health.' The quick ratio is not the same as the current ratio, and a quick ratio of 0.8 does not necessarily imply the current ratio is below 1. The statement makes an assumption about the current ratio that cannot be guaranteed from the quick ratio alone. 
Option 4: 'The company may struggle to meet short-term obligations without selling inventory.' This aligns with the interpretation of a quick ratio below 1: liquidity is tighter because some current assets (like inventory) are not included in the quick ratio, so reliance on selling inventory to satisfy short-term obligations is implied. 
In summary, the key idea is that a quick ratio below 1 indicates potential difficulty meeting short-term obligations without converting inventory or other less liquid assets, whereas ratios above 1 indicate stronger immediate liquidity. The only option that accurately reflects this understanding is Option 4, while the others contradict the implications of a 0.8 quick ratio or introduce incorrect assumptions about related measures.

A company’s quick ratio is 0.8. What does this indicate about its liquidity? 一家公司的速动比率是 0.8。这对其流动性有何指示？

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