Quick ratio 1.5:1, current assets Rs.1 00000 current liabilities Rs. 40000 calculate the value ofstock
Question
Quick ratio 1.5:1, current assets Rs.1 00000 current liabilities Rs. 40000 calculate the value ofstock
Solution
The Quick Ratio (also known as the Acid-Test Ratio) is calculated by deducting inventories from current assets and then dividing by current liabilities. It measures a company's ability to meet its short-term obligations with its most liquid assets.
Here's how you can calculate the value of stock:
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First, we need to calculate the Quick Assets. Quick Assets are current assets minus inventory (stock). We can rearrange the Quick Ratio formula to find the value of Quick Assets:
Quick Assets = Quick Ratio * Current Liabilities Quick Assets = 1.5 * 40000 Quick Assets = Rs. 60000
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Then, we can find the value of stock (inventory) by subtracting Quick Assets from Current Assets:
Stock = Current Assets - Quick Assets Stock = 100000 - 60000 Stock = Rs. 40000
So, the value of the stock is Rs. 40000.
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