A Company's liquid assets are Rs5,00,000 and its current liabilities are Rs3,00,000. Thereafter, it paid 1,00,000 to its trade payables. Quick ratio will be:
Answer & explanation
Correct answer: option 4
After Payment of Trades Payable, the liquid assets will also be reduced by ₹1,00,000 i.e ₹4,00,000 and Current Liabilities will also reduced by ₹100000 i.e. ₹200000.
Quick Ratio = 4,00,000/200,000
= 2:1