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Question
A Company’s Liquid Assets are ₹ 6,00,000, Inventory is ₹ 1,50,000 and its Current Liabilities are ₹ 4,00,000. Subsequently, it purchased goods for ₹ 1,00,000 on credit. Quick Ratio will be ______.
Options
1.5 : 1
1.2 : 1
1.4 : 1
1.7 : 1
MCQ
Fill in the Blanks
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Solution
A Company’s Liquid Assets are ₹ 6,00,000, Inventory is ₹ 1,50,000 and its Current Liabilities are ₹ 4,00,000. Subsequently, it purchased goods for ₹ 1,00,000 on credit. Quick Ratio will be 1.2 : 1.
Explanation:
Liquid Assets = ₹ 6,00,000
Current Liabilities = ₹ 4,00,000
After purchased goods for ₹ 1,00,000 on credit,
Current Liabilities = 4,00,000 + 1,00,000
= ₹ 5,00,000
Quick Ratio = `"Liquid Assets"/"Current Liabilities"`
= `(6,00,000)/(5,00,000)`
= 1.2 : 1
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