Practical Problem 13

Current Liabilities =  3,00,000
Working Capital  =  8,00,000
Inventory =  2,00,000
Calculate Quick Ratio.

SOLUTION:

Current assets = Current liabilities + Working capital

                        = 3,00,000 + 8,00,000

                        = ₹ 11,00,000

 

Quick assets = Current assets – Inventory

                     = 11,00,000 – 2,00,000

                     = ₹ 9,00,000

Quick liability = Current liabilities –  Bank O / D

                      = ₹ 3,00,000 – 0

                      = ₹ 3,00,000

 

Quick ratio = Quick Assets ÷ Quick Liabilities

∴ Quick Ratio =900000/300000

∴ Quick Ratio =3/1

∴ Quick Ratio =3:1