What components are included in the Quick Ratio numerator as described?

• A. Cash + Receivables + Marketable Securities
• B. Cash + Inventory + Marketable Securities
• C. Cash + Receivables + Inventory
• D. Cash + Accounts Payable + Marketable Securities

Answer: (A)

The Quick Ratio focuses on assets that can be quickly turned into cash to cover short-term obligations. The numerator includes cash, marketable securities, and accounts receivable (receivables) because these are highly liquid and can be converted to cash with little delay or loss of value. Inventory isn’t included since it may take longer to sell and can require markdowns, making it less reliable for immediate liquidity. Liabilities like accounts payable aren’t part of the numerator since the Quick Ratio measures assets, not obligations. So the correct components are cash, receivables, and marketable securities.