calculate quick ratio : total current asset rs 670000 current liability rs 150000 inventories rs 50000 prepaid expenses rs 20000
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Current ratio = Current asset / Current liabilities
= 80000/50000 = 1.6
Quick ratio = Quick assets / Current liabilities
= 60000/ 50000 = 1.2
Current Assets = Trade receivables + Cash in hand + Cash at Bank + Inventories + Advance Tax
= 30000 + 10000 + 10000 + 20000 + 1000 = 80000
Quick Assets = Current Assets - Inventories = 80000-20000 = 60000
Current Liabilities = 50000.
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