1.

Calculate Quick Ratio from the following information: Current assets – 8,00,000; Current liabilities- Rs. 4,00,000; Inventories Rs.  1,40,000; and prepaid expenses Rs.  60,000.

Answer»

Quick Ratio = (Quick Assets)/(Current liabilities)

Quick assets = Current assets – Inventories – Prepaid expenses 

= Rs.  8,00,000 – (1,40,000 – 60,000) 

= Rs.  6,00,000 

∴ Quick ratio = 600000/400000

= 6:4 

= 3:2 = 1.5:1



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