![]() ![]() Security name Zoom Video Communications Inc - Class A.On the other hand, a high or increasing quick ratio generally indicates that a company is experiencing solid top-line growth, quickly converting receivables into cash, and easily able to cover its financial obligations. In general, low or decreasing quick ratios generally suggest that a company is over-leveraged, struggling to maintain or grow sales, paying bills too quickly or collecting receivables too slowly. ![]() As a result, they are justifiably excluded from assets that are ready sources of immediate cash. Inventories generally take time to be converted into cash, and if they have to be sold quickly, the company may have to accept a lower price than book value of these inventories. The ratio derives its name presumably from the fact that assets such as cash and marketable securities are quick sources of cash. The quick ratio is more conservative than the Current Ratio because it excludes inventories from current assets. Zoom Video Communications (NAS:ZM) Quick Ratio Explanation
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