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Question
A Company’s liquid assets are ₹ 5,00,000 and its current liabilities are ₹ 3,00,000. Thereafter, it paid ₹ 1,00,000 to its trade payables. Quick ratio will be ______.
Options
1.33 : 1
2.5 : 1
1.67 : 1
2 : 1
MCQ
Fill in the Blanks
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Solution
A Company’s liquid assets are ₹ 5,00,000 and its current liabilities are ₹ 3,00,000. Thereafter, it paid ₹ 1,00,000 to its trade payables. Quick ratio will be 2 : 1.
Explanation:
Initial Liquid Assets = ₹ 5,00,000
Initial Current Liabilities = ₹ 3,00,000
After Payment:
Liquid Assets = 5,00,000 − 1,00,000
= ₹ 4,00,000
Current Liabilities = 3,00,000 − 1,00,000
= ₹ 2,00,000
Quick Ratio = `"Liquid Assets"/"Current Liabilities"`
= `(4,00,000)/(2,00,000)`
= 2 : 1
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