Question

Current Assets 3,00,000; Inventories * 60,000; Working Capital 2,52,000. Calculate Quick Ratio.
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Answer 1

Answer:

Quick Ratio = 5 : 1

Explanation:

Given :

Current Assets = 3,00,000

Inventories = 60,000

Working Capital = 2,52,000

To find :

Calculate Quick Ratio

Solution :

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

★ Quick Assets :

Quick Assets = Current Assets - Inventories

⇒ 3,00,000 - 60,000

⇒ 2,40,000

Quick Assets = 2,40,000

★ Current Liabilities :

Working Capital = Current Assets - Current Liabilities

⇒ 2,52,000 = 3,00,000 - Current Liabilities

⇒ Current Liabilities = 3,00,000 - 2,52,000

⇒ 48,000

Current Liabilities = 48,000

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

⇒ $\sf{\dfrac{2,40,000}{48,000}}$

⇒ $\sf{\dfrac{5}{1}}$

∴ Quick Ratio = 5 : 1

Answer 2

Answer:

• Current Assets = Rs. 3,00,000
• Inventories = Rs. 60,000
• Working Capital = Rs. 2,52,000

$\underline{\boxed{\sf Quick\ Ratio=\dfrac{Current\ Assets- Inventories}{Current\:Liabilities}}}$

Everything is given, except Current Liabilities, so we can calculate it using :

⇢ Working Capital = Current Assets - Current Liabilities

⇢ Rs. 2,52,000 = Rs. 3,00,000 - Current Liabilities

⇢ Current Liabilities = Rs. 3,00,000 - Rs. 2,52,000

⇢ Current Liabilities = Rs. 48,000

⠀⠀⠀⠀⠀───────────────

$\underline{\bigstar\:\textsf{According to the given Question :}}$

$:\implies\sf Quick\ Ratio=\dfrac{Current\ Assets- Inventories}{Current\:Liabilities}\\\\\\:\implies\sf Quick\ Ratio=\dfrac{Rs.\ 3,00,000- Rs.\ 60,000}{Rs.\ 48,000}\\\\\\:\implies\sf Quick\ Ratio = \dfrac{Rs.\ 2,40,000}{Rs.\ 48,000}\\\\\\:\implies\sf Quick\ Ratio = \dfrac{5}{1}\\\\\\:\implies\sf Quick\ Ratio =5 :1$

⠀

$\therefore\:\underline{\textsf{Hence, Quick Ratio will be \textbf{5 : 1}}}.$