What indicates a ratio is healthy regarding quick assets?

To determine the health of a business's financial position with respect to its quick assets, it’s essential to look at how these assets compare to the company’s obligations. The correct option signifies that quick assets—those assets that can be quickly converted into cash, such as cash and cash equivalents, receivables, and marketable securities—are substantial enough to cover fixed liabilities.

When quick assets meet or exceed half of fixed liabilities, it indicates that the company possesses a solid buffer of liquid assets to manage its long-term obligations. This ratio helps assess the company's ability to not only cover immediate needs but also sustain operations over a longer period while managing fixed liabilities. It is a sign of financial stability since having enough quick assets in relation to fixed liabilities reduces the risk of liquidity issues that may arise if unexpected expenses occur or if cash flow fluctuates.

Understanding the context of the other choices reinforces why this one is particularly significant. For example, while having current assets greater than current liabilities reflects a good short-term financial position, it doesn't exclusively focus on the quick assets. Operating earnings outpacing gross profit points to operational efficiency but does not directly evaluate asset liquidity. Lastly, ensuring debts are less than total cash reserves is also positive but does not directly address the specific