Calculate dr''s quick ratio, Financial Econometrics

Q. Calculate DR's quick ratio?

DR has the following balances under current assets and current liabilities:

Current assets

$

Current liabilities

$

Inventory

50,000 

Trade payables

88,000

Trade receivables

70,000 

Interest payable

7,000

Bank

10,000

 

 

Calculate DR's quick ratio.

Solution:

Quick ratio      =   (current assets -inventory) / current liabilities

=   (70,000 + 10,000) / (88,000 + 7,000)

=   0.84

Posted Date: 8/30/2013 2:56:36 AM | Location : United States







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