Question

Red Health, an ambulance aggregator has paid its employees only half their January salaries. The company has gone in for funding. In response to queries from Mint, Red Health’s founder and CEO said, “Our funding round is closed and we are waiting money to be wired by this week. On the basis of that, and to manage our working capital, we had given a choice to our old employees to hold their salaries back.”

The original Current Ratio and Quick Ratio of Red Health are more than one. Which one of the following will be correct for the month of January 2024 if the company had held back the salaries of its employees for the same month?

पर्याय

• Both Current Ratio and Quick Ratio will decrease.

• Both Current Ratio and Quick Ratio will increase.

• No change in the Quick Ratio but the Current Ratio will increase.

• No change in the Current Ratio but the Quick Ratio will increase.

Answer 1

Both Current Ratio and Quick Ratio will increase.