Start learning 50% faster. Sign in now
Get Started with ixamBee
Start learning 50% faster. Sign in nowQuick 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.
The cost of equity share capital is greater than the cost of debt because_________.
The provisions on ________assets should not be reckoned for arriving at net NPAs.
Recently the Government raises maximum tenure of PSU banks' CEO to ____ years, from the earlier 5 years.
Depreciation remains constant according to which method?
A contract between two parties in which one party purchases protection from another party against losses from the default of a borrower for a defined pe...
What is the full form of MPC that is entrusted with the task of fixing the benchmark policy rate?
When was the Securities and Exchange Board of India enacted?
How much did IIFCL invest in Infrastructure Investment Trusts (InvITs) during FY2023-24, as mentioned in the Annual Report of IIFCL 2023-24?
What is the minimum percentage of the total assets owned by the borrower that is required for an ARC to effect change in or takeover of the management ...
Golden triangle is famous for which of the following producing region of the world?