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
Explain Support activitiesand production process activity Support activities are for example schedule production set up machine purchase materials inspect item customer orde
What Procedure are followed in kaizen costing In brief kaizen costing involves setting a new cost reduction target every month. The difference between the target profits and th
Stages in activity based costing The different stages in activity based costing are listed below and are shown in figure below. 1) Identification of the activities that may
Under this method, approximated profit is calculated depends on transactions of the ensuing period. Afterward, decrease or increase in working capital is determined adjusting the e
State Budgetary Control A budget is a quantitative expression of a plan of action relating to the forthcoming budget period. It represents a written operational plan of managem
Break even analysis and target profit, taxes - Patterson Parkas Company's sales revenue is $30 per unit, variable costs are $19.50 per unit, and fixed costs are $147,000. a)Compute
Issa Company manufactures a personal computer designed for use in schools and markets it under its own label. Issa has the capacity to produce 25000 units a year but is currently p
Answer each of the following independent questions in the space provided on page 11. Round all computations to the nearest dollar. a) Company A deposited $15,000 in a savings ac
Question 1: (a) Discuss the main features and problems which Mauritius has to face as a small island developing country. (b) What are the factors which have led to the f
A firm wants to buy a new machine and the following quotation has been received. Cost of machine US$100 000 Freight and insurance US$5 000 The new machine will last for five
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