Quick ratio = (Current assets – inventory – prepaid expenses)/current liabilities. As the quick ratio includes cash but no inventory, there will be a change in the numerator on account of decrease in cash (which is a current asset). Denominator will remain unchanged. So overall, quick ratio will decrease after this change. For example: if quick ratio is 1.2, and if current assets are 1200 and current liabilities are 1000 (1200/1000 =1.2). if we purchase inventory (let’s say for Rs 100), then it will not make a difference in quick assets which exclude inventory. But they include cash, then there will be a reduction in quick assets. Quick assets then will become: 1200 -100 = 1100. There is no change in a liability here. So new quick ratio will become: 1100/1000 = 1.1. So, clearly answer will be (a). There is a reduction in a numerator and result is a lesser quick ratio as compared to the previous one.
P, Q and R together started a business. Seven times the investment of P equals nine times the investment of Q and the capital of Q is twice that of R. F...
The ratio between the number of males and females in a college is 23: 24. If the number of males is increased by 20% and the number of females is increa...
In an office, the ratio of the number of males to number of females is 11:7. If 2 males joined the class and 6 females left the class, then the ratio of...
Spirit and water are present in a vessel in the ratio 4:3. If 5 liters of water and 5 liters of spirit are added to this mixture, the ratio of spirit an...
Total population of city P and Q is 3740 and 4320 respectively. If the ratio of number of males to females in city is P and Q is 6:5 and 5:4 respectivel...
The ratio between two numbers is 7:8. If each number is increased by 9, the ratio between then become 10:11, find the difference between numbers.
The boys and girls in a college are in the ratio 3:2. If 15% of the boys and 25% of the girls are adults, then adults are approximately how much % less ...
Rs 11,550 has to be divided between X, Y & Z such that X gets 4/5 of what Y gets and Y gets 2/3 of what Z gets. How much more does Z get over X (in Rs)?
P, Q and R together started a business. Three times the investment of P equals five times the investment of Q and the capital of Q is twice that of R. F...
A plot has to be divided among P, Q and R in the ratio 2:3:5 respectively. If the area of plot received by R is 5200m² more than the area of plot recei...