Current Assets Rs 3,00,000; Inventories Rs 60,000; Working Capital Rs 2,25,000. Calculate Quick Ratio.

3:1

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3.2:1

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2:1

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1:1

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Solution

The correct option is A 3.2:1
Quick ratio = Liquid assets (Current Assets - inventories)
------------------------------------------------------------------
Current Liabilities
= 3,00,000 - 60,000
-----------------------------
75,000 (Working Note 1)
= 2,40,000
----------------
75,000
= 3.2 : 1

Working note number 1 - calculation of current liabilities
Working capital = Current Assets - Current liabilities
Current liabilities = Current assets - Working capital.
= 3,00,000 - 2,25,000
= 75,000.

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Similar questions

Current Assets ₹ 3,00,000; Inventories ₹ 60,000; Working Capital ₹ 2,52,000.
Calculate Quick Ratio.

Current ratio is 4 and quick ratio is 2.5 and working capital is Rs 6,00,000. Find out Current Assets and Current Liabilities and Inventory and Quick Asset.

Following information is given to you :
(I) Inventory Turmover Ratio 5 Times

(II) Inventory at the end is Rs. 5,000 more than the inventory in the beginning.

(III) Revenue from Operations (all credit) Rs. 2,00,000

(IV) Gross Profit Ratio $\frac{1}{4}$ on cost.

(V) Current Liabilities Rs. 60,000.

(VI) Quick Ratio 0.75.

Calculate (i) Cost of Revenue from Operations, (ii) Opening Inventory Closing inventory, and (iii) Quick Assets and Current Assets.

From the following information, calculate Operating Ratio and Quick Ratio.

Revenue from operations Rs 3,00,000; Opening Inventory Rs 10,000; Purchases Rs 1,20,000; Wages Rs 30,000 ; Closing Inventory Rs 30,000; Selling and Distribution Expenses Rs 10,000; Currnet Assets Rs 2,00,000 and Current Liabilities Rs 1,20,000.

Q. Given current ratio =

2.5

Quick ratio =

1.5

Net working capital = Rs

30, 000

What is the amount of quick assets?

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