Question

if the current liabilities are 120000 ,working capital rupees 360000 and inventory is rupees 60000 . its quick ratio will be

a) 3:1
b ) 3.5:1
c ) 4: 1
d) 4.5.1


please answer me quickly please very urgent ​

Answer 1

Quick ratio = Liquid assets (Current Assets - inventories)

                   ------------------------------------------------------------------

                        Current Liabilities

                 = 3,00,000 - 60,000

                   -----------------------------

                          75,000 (Working Note 1)

                =  2,40,000

                   ----------------

                    75,000

               = 3.2 : 1

Working note number 1 - calculation of current liabilities

Working capital = Current Assets - Current liabilities

Current liabilities = Current assets - Working capital.

                           = 3,00,000 - 2,25,000

                           = 75,000.