Question

The quick ratio, Q, is calculated using the formula Q= CA-I-P/ CL, where CA is the value of the company’s current assets, I is inventory, P is prepaid expenses, and CL is current liabilities. Rearrange the formula for current assets

Answer 1

CA = Q·CL +I +P

Explanation:

Multiply by the denominator, then add the opposite of all terms that are not CA.

`Q=(CA-I-P)/(CL)\\\\Q\cdot CL=CA-I-P\\\\Q\cdot CL+I+P=CA\\\\\boxed{CA=Q\cdot CL+I+P}`