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Question : A company liquid assets are Rs.5,00,000 and its current liabilities are Rs.3,00,000. Thereafter, it paid Rs.1,00,000 to its trade payable. Quick Ratio will be -

Option 1: 3.30 : 1

Option 2: 5 : 1

Option 3: 6.70 : 1

Option 4: 2 : 1


Team Careers360 17th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: 2 : 1


Solution : Liquid assets = Rs.5,00,000 - Rs.1,00,000 (Cash paid to Sundry creditor) = Rs.4,00,000.

Current liabilities = Rs.3,00,000 - Rs. 1,00,000 (Sundry creditors) = Rs.2,00,000.

Quick Ratio = Liquid assets/Current liabilities

                   = Rs.4,00,000/Rs.2,00,000

                   = 2 : 1

Hence the correct answer is option 4.

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