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
The most ticklish difficulty that is faced through the finance manager is the resolve of the amount of working capital requirement at a specific level of production. To resolve thi
First Cut Analysis of Costs The allocation of costs and assets will produce a value chain that illustrates graphically the distribution of a firm's costs. It can prove reveali
Determine the Price determination process 1) Estimating the demand for the product: the first step in determining the price of a new product is to estimation the anticipated
Cretin Enterprises uses a predetermined overhead rate of $21.40 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $171,200 of total manufact
What is your base rate for graduate level accounting? If I decide to use your service can the tutor and I speak via skype? I''m not located in the U.S.
Identify whether each of the following transactions involves spot exchange, contract, or vertical integration. For the last item if the contract length is optimal or suboptimal.
Costing Cost accounting can be described as the collection, interpretation of cost and assignment. In succeeding chapters, you will learn about alternative costing techniq
Accounts Payable Turnover Ratio is a short-term liquidity measure which is used to calculate the rate at which a company pays off its suppliers. Accounts payable turnover ratio is
Stock-out costs These are the opportunity costs of running out of stock. They comprise: 1) The costs of lost customer sales, and therefore lost contribution to fixed costs.
Difficulties in cost reduction 1) Resistance by employees to pressure to reduce cost usually because the nature and purpose of the campaign has not been properly explained to t
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