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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. |
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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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