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Question
Current Assets ₹ 1,00,000; Inventory ₹ 55,000; Working Capital ₹ 70,000. Calculate Quick Ratio.
Numerical
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Solution
Liquid Assets = Current Assets + Inventory
= ₹ 1,00,000 − ₹ 55,000
= ₹ 45,000
Working Capital = Current Assets − Current Liabilities
₹ 70,000 = ₹ 1,00,000 − Current Liabilities
Current Liabilities = ₹ 1,00,000 − ₹ 70,000
= ₹ 30,000
Quick Ratio = `"Liquid Assets"/"Current Liabilities"`
= `(₹ 45,000)/(₹ 30,000)`
= 1.5 : 1
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