Question

If the work certified of a contract is Rs.
2,00,000 and retention money is Rs. 30,000,
compute the cash ratio.
Options
O 85 Percentage
O 15 Percentage
O 87 Percentage
O 13 Percentage
Clear Response​

Answer 1

Answer:

Cash Ratio will be 15 percentage If the work certified of a contract is Rs.

2,00,000 and retention money is Rs. 30,000.

Explanation:

• Cash Ratio will be calculated - Dividing Retention divide by Contract amount.

Cash Ratio = $\frac{Retention Money}{Contract Amount}$

⇒ Cash Ratio = 30000 × 100 ÷ 200000

                      ⇒ 15%

Therefore, Cash Ratio will be 15 percentage for the company.

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Answer 2

Answer:

Cash Ratio will be 15 percentage If the work certified of a contract is Rs.

2,00,000 and retention money is Rs. 30,000.

The cash ratio-

The cash ratio is a measurement of a company's liquidity. It specifically calculates the ratio of a company's total cash and cash equivalents to its current liabilities.

Cash ratio = (Cash + Marketable Securities) / Current Liabilities.

Retention money -

Retention money is an amount held back from a payment made under a construction contract. It is usually a percentage of the amount payable of each instalment.

Explanation:

Cash Ratio will be calculated - Dividing Retention divide by Contract amount.

Cash Ratio =  $\frac{Retention Money}{Contract Amount}$

⇒ Cash Ratio = 30000 × 100 ÷ 200000

                        ⇒ 15%

Therefore, Cash Ratio will be 15 percentage for the company.

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