Read the information carefully and answer the questions.
| Particulars | Amount (₹) |
| Inventories | 50,000 |
| Trade Receivables | 50,000 |
| Advance Tax | 4,000 |
| Cash and Cash Equivalents | 30,000 |
| Trade Payables | 1,00,000 |
| Bank overdraft | 4,000 |
Quick Ratio of the firm is:
Answer & explanation
Correct answer: option 3
The correct answer is option 3- 0.77:1.
Quick assets = Trade Receivables + Cash and Cash Equivalents
= 50,000 + 30,000
= 80,000
Current liabilities = Trade Payables + Bank overdraft
= 1,00,000 + 4,000
= 1,04,000
Quick ratio = Quick assets/Current liabilities
= 80,000/1,04,000
= 0.7692 :1 or 0.77:1