Question
A company has Current Assets = ₹5 lakh (Inventory =
₹2 lakh) and Current Liabilities = ₹2 lakh. What is the Quick Ratio?Solution
Quick Ratio = (CA – Inventory) ÷ CL = (5 – 2) ÷ 2 = 1.5. This excludes inventory as it is less liquid.
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