Study the information given below carefully and answer the following question.
| Particulars | 2020 (Amount in ₹) |
2019 (Amount in ₹) |
2018 (Amount in ₹) |
| Outstanding Expenses | 50,000 | 40,000 | 25,000 |
| Prepaid Expenses | 3,00,000 | 2,50,000 | 3,50,000 |
| Trade Payables | 18,00,000 | 16,00,000 | 14,00,000 |
| Inventory | 12,00,000 | 10,00,000 | 11,00,000 |
| Trade Receivables | 11,00,000 | 8,00,000 | 10,00,000 |
| Cash In hand | 17,00,000 | 12,00,000 | 15,00,000 |
| Revenue from Operations | 24,00,000 | 18,00,000 | 20,00,000 |
| Gross Profit Ratio | 12% | 15% | 18% |
Quick Ratio for the year 2018 will be....................
Answer & explanation
Correct answer: option 1
The correct answer is option 1- 1.75:1.
Quick Assets = Trade Receivable+Cash in hand
= 10,00,000 + 15,00,000
= ₹25,00,000
Current Liabilities = Outstanding expenses + trade payables
= 25,000 + 14,00,000
= ₹14,25,000
Quick Ratio = Quick Assets/Current liabilities
= 25,00,000/14,25,000
= 1.75:1