A Company rsquo s Quick Ratio is 1 8 1 Liquid Assets are Rs5 40 000 and Inventory is Rs1 50 000 Its ...........

A Company’s Quick Ratio is 1.8 : 1; Liquid Assets are Rs5,40,000 and Inventory is Rs1,50,000. Its Current Ratio will be :

2 : 1

2.3 : 1

1.8 : 1

1.3 : 1

- The Quick Ratio is given as 1.8:1. This ratio compares liquid assets to current liabilities.

- Liquid Assets are Rs 5,40,000. These include cash and other assets quickly convertible into cash.

- The Inventory is Rs 1,50,000, which is not included in the Quick Ratio calculation.

- Current Ratio includes both liquid assets and inventory.

- Calculation for Current Ratio:

- Quick Assets = Liquid Assets = Rs 5,40,000

- Current Assets = Quick Assets + Inventory = Rs 5,40,000 + Rs 1,50,000 = Rs 6,90,000

- Quick Ratio = Liquid Assets / Current Liabilities = 1.8

- Current Liabilities = Rs 5,40,000 / 1.8 = Rs 3,00,000

- Current Ratio = Current Assets / Current Liabilities = Rs 6,90,000 / Rs 3,00,000 = 2.3:1

- Correct Answer: Option 2: 2.3:1

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