Economics · Economy

Why is inventory excluded from the numerator when calculating the quick ratio?

Verified Solution4 OptionsUpdated: October 2026👁️1 View

1Inventory is considered a long-term liability
2Inventory values fluctuate daily due to depreciation
3Inventory is categorized as a fixed asset
4Inventory is relatively less liquid compared to cash and receivables✓

Correct answer

Inventory is relatively less liquid compared to cash and receivables

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