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
What are the Advantages or uses of break even charts Computation of break even point or presentation of cost volume and profit relationship by way of break even charts has the
Explain the concepts of costs. A cost accountant is mainly concerned with the following cost concepts. 1. Concept of objectives: it is this concept that gives direction to
a cost-allocation base may be any of the following except: a. cost driver b. cost pool c. way to link indirect cost to a cost object d. nonfinancial quantity
Under this method, approximation is made of payments and cash receipts in the ensuring period. The dissimilarity of these payments and receipts indicates deficiency or surplus of c
Analysis Various business decisions have recurrent themes: whether to the outsource production or to the support functions, what level of production and pricing to establish, w
Steady state condition In many cases, the Markov process will converge to a steady state or equilibrium. In general, as number of transitions `n' increase, the state values
Need a quote to complete my homework.
LIMITATIONS OF ABC ANALYSIS However ABC analysis is a basic tool for exercising selective control over many inventory items, it does not, in its current form, allow precise con
Explain the growth, index, sectoral, gilt and money market methods? (i) What are the key variations among the open ended and close ended methods? What are the plus and minuses
Prepare an estimation of working capital needs from the subsequent information of a trading relates with: (a) Projected Annual Sales 1,00,000
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