Annie's Attic Reported the Following Information for September 30 Instructions: (1) Explain the Purpose of the Quick Ratio

Essay

Annie's Attic reported the following information for September 30.
$$\begin{array}{l}\begin{array} { | l | r | } \hline \text { Cash }&\$23,000\\\hline \text { Accounts receivable } & 53,200 \\\hline \text { Merchardise invertory } & 220,000 \\\hline \text { Prepaid experse } & 13,200 \\\hline \text { Accounts payable } & 83,000 \\\hline \text { Balaries payable } & 12,000 \\\hline \text { Other current payables } & 1,500 \\\hline\end{array}\end{array}$$ Instructions: (1) Explain the purpose of the quick ratio. (2) Calculate the quick ratio to two decimals. (3) What does the quick ratio reveal about Annie's Attic?