Question

Compute Quick Ratio If current Assets of a company are

Rs.65000, its Current Liabilities are Rs.15000 and Inventory is 5000​

Answer 1

Answer:

Quick Ratio = 4 : 1

Explanation:

Given :

• Current Assets of a company = Rs. 65,000
• Current Liabilities = Rs. 15,000
• Inventory = Rs. 5,000

To find :

• Quick Ratio

Solution :

$\sf{Quick\:Ratio ={\dfrac{Quick \: Assets}{Current \: Liabilities}}}$

Quick Assets = Current Assets - Inventory

$\longrightarrow$ 65,000 - 15,000

$\longrightarrow$ 60,000

Quick Assets = 60,000

Current Liabilities = 15,000

$\sf{Quick\:Ratio ={\dfrac{Quick \: Assets}{Current \: Liabilities}}}$

$\longrightarrow \: \dfrac{60,000}{15,000} \: = \: \dfrac{4}{1}$

$\longrightarrow \: \dfrac{4}{1} \: = \: 4 : 1$

Therefore,

Quick Ratio = 4 : 1

Answer 2

Given :

• Current Assets - 65,000

• Current Liabilities - 15,000

• Inventory - 5,000

To Find :

Quick Ratio

${\underline{\boxed{Quick \: Ratio = \tfrac{Quick \: Assets}{Current \: Liabilities} }}}$

• Quick Assets = Current Assets - Inventories

$\to 65000 - 5000$

$\to \: 60000$

Quick Assets = 60,000

$\\ \to \: \frac{Quick \: Assets}{Current \: Liabilities}$

$\to \: \frac{60,000}{15,000}$

$\to \: \frac{4}{1} = 4 : 1$

$\therefore \sf \: Quick \: Ratio \: = 4 : 1$