Find the Quick Ratio of the company Total Current Assets: PHP 100,000.00 Total Current Liabilities: PHP 23,000.00 Inventory: PHP 28,900.00

The Quick Ratio, also known as the Acid-Test Ratio, is a measure of a company's ability to meet its short-term obligations with its most liquid assets. It is calculated using the formula:

\[
\text{Quick Ratio} = \frac{\text{Total Current Assets} - \text{Inventory}}{\text{Total Current Liabilities}}
\]

Given:
- Total Current Assets = PHP 100,000.00
- Total Current Liabilities = PHP 23,000.00
- Inventory = PHP 28,900.00

Let's substitute these values into the formula:

\[
\text{Quick Ratio} = \frac{100,000 - 28,900}{23,000}
\]

Now, let's compute the value.The Quick Ratio of the company is approximately **3.09**.

This means the company has about 3.09 PHP in liquid assets (excluding inventory) for every 1 PHP of its current liabilities.

Would you like more details, or do you have any questions? Here are a few related questions you might find useful:

1. What does a Quick Ratio of 3.09 signify for a company's financial health?
2. How does the Quick Ratio differ from the Current Ratio?
3. What are some limitations of the Quick Ratio?
4. Why is inventory excluded from the Quick Ratio calculation?
5. How can a company improve its Quick Ratio?

**Tip:** The Quick Ratio is most useful when inventory is not easily converted to cash.

Learn how to calculate the Quick Ratio for a company with PHP 100,000 in current assets, PHP 23,000 in liabilities, and PHP 28,900 in inventory. This financial ratio is essential for assessing a company's liquidity and ability to meet short-term obligations. Suitable for finance students and professionals.

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