Question : Cash Balance Rs.7,000; Trade Payable Rs.50,000; Inventory Rs.60,000; Trade Receivables Rs.73,000 and Prepaid Expenses are Rs.20,000. What will be the Liquid Ratio?
Option 1: 3.2:1
Option 2: 2:1
Option 3: 1.6:1
Option 4: 1.7:1

Question

Question : Cash Balance Rs.7,000; Trade Payable Rs.50,000; Inventory Rs.60,000; Trade Receivables Rs.73,000 and Prepaid Expenses are Rs.20,000. What will be the Liquid Ratio?

Option 1: 3.2:1

Option 2: 2:1

Option 3: 1.6:1

Option 4: 1.7:1

Team Careers360 · Accepted Answer

Correct Answer: 1.6:1

Solution : Liquid Ratio = Cash + Trade Receivables = 7000+73000 = ₹80000
Current Liability = Trade Payable = ₹50,000
Liquid Ratio = Liquid Asset / Current Liability = 80000/50000 =1.6:1
Hence option 3 is the correct answer.

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Question : Cash Balance Rs.7,000; Trade Payable Rs.50,000; Inventory Rs.60,000; Trade Receivables Rs.73,000 and Prepaid Expenses are Rs.20,000. What will be the Liquid Ratio?Option 1: 3.2:1Option 2: 2:1Option 3: 1.6:1Option 4: 1.7:1

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Question : Cash Balance Rs.7,000; Trade Payable Rs.50,000; Inventory Rs.60,000; Trade Receivables Rs.73,000 and Prepaid Expenses are Rs.20,000. What will be the Liquid Ratio?
Option 1: 3.2:1
Option 2: 2:1
Option 3: 1.6:1
Option 4: 1.7:1