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    Question

    A company has the following balances on its Balance

    Sheet: • Cash & Bank Balances: ₹2 crore • Trade Receivables: ₹4 crore • Inventory: ₹6 crore • Short-term Investments: ₹3 crore • Trade Payables: ₹1 crore • Provisions for bonus and doubtful debts: ₹2 crore • Other Current Liabilities: ₹7 crore Based on this information, what is the Quick Ratio of the company?
    A 0.9 Correct Answer Incorrect Answer
    B 1.5 Correct Answer Incorrect Answer
    C 0.6 Correct Answer Incorrect Answer
    D 0.75 Correct Answer Incorrect Answer

    Solution

    Quick Assets = Current Assets – Inventory  Quick assets = ₹2 + ₹4 + ₹3 = ₹9 crore Current Liabilities = ₹1 + ₹2 + ₹7 = ₹10 crore Quick ratio = (Current Assets – Inventory) / Current Liabilities = 9/10 = 0.9

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