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      Question

      Calculate the Quick ratio based on above

      information? Read the following information to answer the below questions: ┬а Net Sales = 40,00,000 (20 % GP Element) out of which 40% is on credit. Opening Inventories were 60 % of closing inventories. Opening Receivables are 120,000. ┬а
      A 1.40 Correct Answer Incorrect Answer
      B 2.51 Correct Answer Incorrect Answer
      C 2.24 Correct Answer Incorrect Answer
      D 1.04 Correct Answer Incorrect Answer

      Solution

      Quick ratio = Quick Assets/Current Liabilities ┬а 3,64,000 / 3,50,000 Quick Assets = Debtors + Cash = 340,000+24000 = 3,64,000 Current Liability = Trade Creditors + Bank Overdraft + Short term borrowings = 200,000+1,20,000+30,000 =3,50,000

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