At which moment the current ratio and quick ratio be same for the company?

No prepaid expenses and inventory

The correct answer is option 4- No prepaid expenses and inventory.

If there are no prepaid expenses and inventory in the business, then-current ratio and the quick ratio will be the same because current assets and liquid assets will be same.

Current Ratio = Current Assets/Current Liabilities

Quick ratio = Quick Assets/Current Liabilities

Current assets include current investments, inventories, trade receivables (debtors and bills receivables), cash and cash equivalents, short-term loans and advances and other current assets such as prepaid expenses, advance tax and accrued income, etc.

Current liabilities include short-term borrowings, trade payables (creditors and bills payables), other current liabilities and short-term provisions.

The quick/liquid assets are defined as those assets which are quickly convertible into cash. While calculating quick assets we exclude the inventories at the end and other current assets such as prepaid expenses, advance tax, etc., from the current assets.