Question

A Company’s liquid assets are ₹ 10,00,000 and its current liabilities are ₹ 8,00,000. Subsequently, it purchased goods for ₹ 1,00,000 on credit. Quick ratio will be ______.

Options

• 1.11 : 1

• 1.22 : 1

• 1.38 : 1

• 1.25 : 1

Answer 1

A Company’s liquid assets are ₹ 10,00,000 and its current liabilities are ₹ 8,00,000. Subsequently, it purchased goods for ₹ 1,00,000 on credit. Quick ratio will be 1.11 : 1.

Explanation:

liquid Assets = ₹ 10,00,000

Current Liabilities = 8,00,000 + 1,00,000

= ₹ 9,00,000

Quick Ratio = `"liquid Assets"/"Current Liabilities"`

= `(10,00,000)/(9,00,000)`

= 1.11 : 1