Question
Firm X and Y have the same quick ratio, but Firm X has
a greater current ratio than Firm Y. Compared to Firm Y, it is most likely that Firm X has:Solution
"Inventory is not included in quick assets while calculating the quick ratio. But inventory is included in the numerator while calculating the current ratio. So, an increase in the numerator for Firm X because of greater inventory makes its current ratio more than Firm Y. Accounts payable are included in current liability, and it’s the same in the case of quick ratio and current ratio. We do not have full information about turnover ratios so can not comment on that. Therefore, greater inventory for Firm X will result in a higher current ratio"
The Parliament passed the Marine Aids to Navigation Bill, 2021 to repeal and replace which of the following Acts?
RecentlyThe Emergency Credit Line Guarantee Scheme (ECLGS) was extended with expanded guarantee cover of _______ amount?
What is the standard weight of a cricket ball?
Consider the following statements:
I. India’s overall (merchandise plus services) exports increased from USD 52.8 billion in June 2021 to U...
What is Phishing?
Who is the only Indian appointed as a member of Badminton World Federation's (BWF) Athletes Commission till 2025?
The Kanger Valley National Park is located in which of the following states?
Which of the following statements about the river Brahmaputra is INCORRECT?
The breaking up and decay of exposed rocks by temperature changes, frost action, plants, animals and human activity is called:
Financial Stability Board was formed under which international forum?