Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Quick ratio
Meaning: this ratio establishes a relationship among quick assets and current liabilities
Objective: the objective of commuting this ratio is to calculate the ability of the firm to meet its short term obligation as and when due without relying upon the realization of stock
Components: there are two components of this ratio which are as under:
a) Quick assets: which means those current assets which can be converted into cash immediately or at a short notice without a loss of value and include the
b) Current liabilities
Computation: this ratio is computed by separating the quick assets by the current liabilities. This ratio is usually expressed as a pure ratio e.g., 1:1. In the form of a formula this ratio may be expressed as under
Interpretation: it shows rupees of quick assets available for each rupee of current liability. Traditionally a quick ratio of 1: is considered to be a satisfactory ratio. Though this traditional rule should not be used blindly since a firm having a quick ratio of more than 1 may not be meeting its short term obligations in time if its current assets consist of doubtful and slow paying debtors while a firm having a quick ratio of less than 1 may be meeting its short term obligations in time because of its very efficient inventory management.
Significance of quick ratio
The quick ratio is very useful in measuring the liquidity position of a firm. It measures the firm capacity to pay off current obligation immediately and is a more rigorous test of liquidity than the current ratio. It is used as a complementary ratio to the current ratio
BUDGET PROBLEM The Budget Director of Dave, Inc. with the assistance of the Controller, Production Manager and the Sales Manager has gathered the following data for use in develop
A managerial accounting strategy focusing mainly on maintaining efficient levels of both components of working capital that is current assets and current liabilities, with respect
Features of product life cycle costing Product life cycle costing is important due to the following features: 1) product life cycle costing involves tracing of costs and re
I am to write thesis on Budget and Budgetary Contro. Can you please help me with contents and notes?
chapter 5 solution
Have lot of questions please any one help me
Procedure of material acquisition A stores record is maintained into which the quantity and value of materials received is entered. Issues of materials to production are made b
What are the Advantages of budgetary control This budgetary control system helps in fixing the goals for the organization as a whole and concerts efforts are made for its achie
WHY VARIANCES IS INVESTIGATED UNDER STANDARD COSTING
Financial Accounting Which is concerned with the provision of information to external parties outside the organization? It is the procedure of measuring, classifying, summariz
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd