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Calculate quick ratio from the informati...

Calculate quick ratio from the information given in illustration 1.

Text Solution

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`"Quick Ratio" =("Quick Assets")/("Current Liabilities")`
Quick Assets = Currect assets - (Inventories + Advance tax)
= Rs. 1,34,000 - (Rs. 50,000 + Rs. 4,000)
= Rs. 80,000
Current Liabilities = Rs. 1,04,000
`"Quick Ratio" =(Rs. 80,000)/(Rs. 1,04,000)=0.77:1`
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