Sale of goods for cash, Sale of goods on credit, Issue of new shares for cash all will improve quick ratio. Sale of goods for cash- It makes to increase of cash and inventory is not included in the liquid assets. So liquid assets is increased by cash amount and there is no effect on current liabilities. Sale of goods on credit- It makes to increase of debtors and inventory is not included in the liquid assets. So liquid assets is increased by debtors amount and there is no effect on current liabilities. Issue of new shares for cash- It makes to increase of cash. Shares will increase the equity. So liquid assets is increased by cash amount and there is no effect on current liabilities. |