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Calculate the quick ratio

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Reference no: EM132984032

The following information has been extracted from the financial statements of Blue Hills Ltd

2020

Cash at bank $ 155 000

Marketable securities 350 000

Accounts receivable 410 000

Inventory 940 000

Prepaid expenses 31 000

Plant and equipment 1 650 000

Accounts payable 879 000

Bills payable 53 000

Accrued expenses 6 000

Require:

Problem a: Calculate the quick ratio for 2020--quick ratio= (Current assets-Inventory)/Current liability

1.(155,000+350,000+410,000+31,000)/(879,000+53,000+6,000)=1.012

2.(155,000+350,000+410,000)/(879,000+53,000+6,000)=0.975:1

Reference no: EM132984032

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