The conversation between human and AI assistant.
What will be effect in the current and quick ratio after this? Sells a vacant lot for $20,000 that had been used in its operations.
Can you explain to me how the current and quick ratio are calculated?
Of course! The current ratio is calculated by dividing the company's current assets by its current liabilities. The quick ratio, also known as the acid-test ratio, is calculated by subtracting inventory from current assets and then dividing by current liabilities. Both ratios are used to measure a company's liquidity and ability to pay its debts.