All but one of the following is true about quick ratios.
A) The quick ratio is calculated by dividing the most liquid of current assets by current liabilities.
B) Service firms that tend not to carry too much inventory will see significantly higher quick ratios than current ratios.
C) Inventory, being not very liquid, is subtracted from total current assets to determine the most liquid assets.
D) Quick ratios will tend to be much smaller than current ratio for manufacturing firms or other industries that have a lot of inventory.
Answer: B
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