Current liabilities Rs. 40,000; Current assets Rs. 1,00,000; Inventory Rs. 20,000. Quick ratio is ?? (a) 1:1 (b) 2.5:1 (c) 2:1 (d) 1:2

Approach to solving the question:If inventory is given, the formula for quick ratio is given by…

Answered: Current liabilities Rs. 40,000; Current…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1. Calculate the liquidity- cash ratios, quick ratios and current ratios.

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Current liabilities Rs. 40,000; Current assets Rs. 1,00,000; Inventory Rs. 20,000. Quick ratio is ?? (a) 1:1 ( b) 2.5:1 (c) 2:1 (d) 1:2