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
Given the persistent problem with starvation in some parts of the world, and the anticipated population growth in developing nations, do we need genetically modified foods? Is it r
Working capital is a necessary requirement for any type of business activity. Banks in India nowadays constitute the main suppliers of working capital credit to any type of busines
Case study of Orion Financial Management - Portfolio Management? Maria Gilbert is a principal in the company of Orion Financial Management. For 20 years she was chief investm
M/s Sunrise Industries estimates its net cash requirement at Rs. 20 million for the subsequent year. Opportunity cost fund is 15 percent per annum of the Companies. The company wil
Describe Financial budgets Financial budgets: financial budgets are concerned with cash receipts and disbursements working capital expenditure financial position and business o
MATERIAL CONTROL It is said that "any fool can sell"—it is buying at the right price that is more critical to the achievement of a satisfactory return on capital employed. Buy
Problem From the following data, calculate overhead variances of following: (a) Variable overhead expenditure variance (b) Fixed overhead expenditure variance (c) Total ov
Comparing real and planned outcomes and responding to Divergences from Plan The final phases in the process outlined in figure shown below of comparing real and planned outcome
Sean Corp. issued a $60,000, 10 year bond at the face rate of 8% annually on 1/1/X0. The market rate was 10%. How much cash will the bond investors receive at the end of the first
different methods used to assign manufacturing overhead
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