28 :- Calculate Quick Ratio from the following:
Working Capital Rs 4,00,000; Total Debts Rs 18,00,000; Non – Current Liabilities Rs 16,00,000; Inventories Rs 1,90,000; Prepaid Expenses Rs 10,000.
Solution :-
Quick Ratio = Quick Assets/Current Liabilities
= 4,00,000/2,00,000
= 2 : 1
Working notes :-
Total Debts = Non – Current Liabilities + Current Liabilities
18,00,000 = 16,00,000 + Current Liabilities
Current Liabilities = Rs 2,00,000
Working Capital = Current Assets – Current Liabilities
4,00,000 = Current Assets – 2,00,000
Current Assets = Rs 6,00,000
Quick Assets = Current Assets – Inventories – Prepaid Expenses
= 6,00,000 – 1,90,000 – 10,000
= Rs 4,00,000