If a Company rsquo s Current Liabilities are Rs80 000 Working Capital is Rs2 40 000 and Inventory is...........

If a Company’s Current Liabilities are Rs80,000; Working Capital is Rs2,40,000 and Inventory is Rs40,000, its quick ratio will be:

3.5 : 1

4 : 1

4.5 : 1

3 : 1

- Quick Ratio: Measures a company's ability to meet its short-term obligations using its most liquid assets.

- Formula: Quick Ratio = (Current Assets - Inventory) / Current Liabilities

- Given:

- Current Liabilities = Rs80,000

- Working Capital = Rs2,40,000

- Inventory = Rs40,000

- Current Assets: Calculated by adding Current Liabilities to Working Capital, so Current Assets = Rs80,000 + Rs2,40,000 = Rs3,20,000.

- Quick Assets: Subtract Inventory from Current Assets, so Quick Assets = Rs3,20,000 - Rs40,000 = Rs2,80,000.

- Calculate Quick Ratio: Quick Ratio = Rs2,80,000 / Rs80,000 = 3.5 : 1

- Correct Option: Option 1, 3.5 : 1

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