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The Current Assets of APE Ltd. are T 6,00,000 ; Current Liabilities are ₹ 2,00,000; Inventories are ₹ 1,50,000; Prepaid Expenses are ₹ 50,000 and Cash and Cash Equivalents are ₹ 1,00,000. What is its quick ratio?
- a)1
- b)2
- c)1.5
- d)3
Correct answer is option 'B'. Can you explain this answer?
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Most Upvoted Answer
The Current Assets of APE Ltd. are T 6,00,000 ; Current Liabilities ar...
Quick assets = Current assets - Inventories - Prepaid expenses
= 6,00,000 - 1,50,000 - 50,000 = ₹ 4,00,000
Quick ratio = Quick assets/Current liabilities = 4,00,000/2,00,000 = 2
= 6,00,000 - 1,50,000 - 50,000 = ₹ 4,00,000
Quick ratio = Quick assets/Current liabilities = 4,00,000/2,00,000 = 2
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Community Answer
The Current Assets of APE Ltd. are T 6,00,000 ; Current Liabilities ar...
Given Information:
Current Assets = T 6,00,000
Current Liabilities = T 2,00,000
Inventories = T 1,50,000
Prepaid Expenses = T 50,000
Cash and Cash Equivalents = T 1,00,000
Calculating Quick Ratio:
The quick ratio is a measure of a company's ability to meet its short-term obligations using its most liquid assets. It is calculated by subtracting inventories and prepaid expenses from current assets and then dividing the result by current liabilities.
Quick Ratio = (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities
Substituting the given values:
Quick Ratio = (T 6,00,000 - T 1,50,000 - T 50,000) / T 2,00,000
Simplifying the expression:
Quick Ratio = T 4,00,000 / T 2,00,000
Simplifying the Quick Ratio:
To simplify the quick ratio, we divide both the numerator and denominator by T 2,00,000:
Quick Ratio = (T 4,00,000 / T 2,00,000) / (T 2,00,000 / T 2,00,000)
Simplifying further:
Quick Ratio = 2 / 1
Final Answer:
Therefore, the quick ratio of APE Ltd. is 2 (option B).
Current Assets = T 6,00,000
Current Liabilities = T 2,00,000
Inventories = T 1,50,000
Prepaid Expenses = T 50,000
Cash and Cash Equivalents = T 1,00,000
Calculating Quick Ratio:
The quick ratio is a measure of a company's ability to meet its short-term obligations using its most liquid assets. It is calculated by subtracting inventories and prepaid expenses from current assets and then dividing the result by current liabilities.
Quick Ratio = (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities
Substituting the given values:
Quick Ratio = (T 6,00,000 - T 1,50,000 - T 50,000) / T 2,00,000
Simplifying the expression:
Quick Ratio = T 4,00,000 / T 2,00,000
Simplifying the Quick Ratio:
To simplify the quick ratio, we divide both the numerator and denominator by T 2,00,000:
Quick Ratio = (T 4,00,000 / T 2,00,000) / (T 2,00,000 / T 2,00,000)
Simplifying further:
Quick Ratio = 2 / 1
Final Answer:
Therefore, the quick ratio of APE Ltd. is 2 (option B).
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The Current Assets of APE Ltd. are T 6,00,000 ; Current Liabilities are 2,00,000; Inventories are 1,50,000; Prepaid Expenses are 50,000 and Cash and Cash Equivalents are 1,00,000. What is its quick ratio?a)1b)2c)1.5d)3Correct answer is option 'B'. Can you explain this answer?
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The Current Assets of APE Ltd. are T 6,00,000 ; Current Liabilities are 2,00,000; Inventories are 1,50,000; Prepaid Expenses are 50,000 and Cash and Cash Equivalents are 1,00,000. What is its quick ratio?a)1b)2c)1.5d)3Correct answer is option 'B'. Can you explain this answer? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about The Current Assets of APE Ltd. are T 6,00,000 ; Current Liabilities are 2,00,000; Inventories are 1,50,000; Prepaid Expenses are 50,000 and Cash and Cash Equivalents are 1,00,000. What is its quick ratio?a)1b)2c)1.5d)3Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The Current Assets of APE Ltd. are T 6,00,000 ; Current Liabilities are 2,00,000; Inventories are 1,50,000; Prepaid Expenses are 50,000 and Cash and Cash Equivalents are 1,00,000. What is its quick ratio?a)1b)2c)1.5d)3Correct answer is option 'B'. Can you explain this answer?.
The Current Assets of APE Ltd. are T 6,00,000 ; Current Liabilities are 2,00,000; Inventories are 1,50,000; Prepaid Expenses are 50,000 and Cash and Cash Equivalents are 1,00,000. What is its quick ratio?a)1b)2c)1.5d)3Correct answer is option 'B'. Can you explain this answer? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about The Current Assets of APE Ltd. are T 6,00,000 ; Current Liabilities are 2,00,000; Inventories are 1,50,000; Prepaid Expenses are 50,000 and Cash and Cash Equivalents are 1,00,000. What is its quick ratio?a)1b)2c)1.5d)3Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The Current Assets of APE Ltd. are T 6,00,000 ; Current Liabilities are 2,00,000; Inventories are 1,50,000; Prepaid Expenses are 50,000 and Cash and Cash Equivalents are 1,00,000. What is its quick ratio?a)1b)2c)1.5d)3Correct answer is option 'B'. Can you explain this answer?.
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