Question

Jessica's boutique has cash of $560, accounts receivable of $630, accounts payable of $1,200, and inventory of $1,450. What is the value of the quick ratio?

Answer 1

Explanation:

Quick Ratio = Liquid Assets/Current liabilities.

Liquid Assets = Current Assets- Inventory

Current liability =A/c payable = $1200

Current Assets = Cash+ A/c receivables+Inventory= $560+630+1450=$2640

Liquid Assets =2640- 1450= $1190.

Quick Ratio = 1190/1200=0.99:1. Ans.