Question

quick ratio 1 .5:1 then cash collected from debtor it will improve ,reduce or not change

Answer 1

Cash collected from debtors will not change the total of quick assets because one quick asset will be replaced by another. Therefore, there will be no change in the Quick Ratio.

Answer 2

Any collection of cash from debtors will not be altered or changed into the total of quick assets, because one quick asset will be immediately replaced by another asset quickly.

Therefore, there will be no change in the Quick Ratio.

The quick ratio is important because it provides a conservative overview of the financial condition of a company.

It demonstrates a wide number of things about a company, especially its financial ability to pay short-term dues or obligations.

It is also applied by investment analysts which covers public limited companies.