Question

Has a current ratio of acid test ratio if the inventory is find out its current liabilities

Answer 1

The acid-test ratio is a more conservative measure of liquidity because it doesn't include all of the items used in the current ratio. The current ratio measures a company's ability to pay short-term liabilities (debt and payables) with its short-term assets (cash, inventory, receivables).

Answer 2

Explanation:

Answer:

current ratio is 2.5:1

current liabilities- 50000

then, current assets is 50000*2.5- 125000

.....

test ratio is 1.5:1

current liabilities is 50000

then, liquid assets is 75000

...

inventory is equal to current assets minus liquid assets... 125000-75000 = 50000

Explanation:

Hope it's help u

@Abhinav

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