ACCA FM · Chapter 3 · Question 3 of 10
A company has inventory of $450k, trade receivables of $380k, cash of $70k and current liabilities of $600k. What are its current ratio and quick (acid test) ratio?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Current ratio 1.50; quick ratio 0.75
Explanation
Current ratio = current assets / current liabilities = (450 + 380 + 70) / 600 = 1.50. Quick ratio excludes inventory = (380 + 70) / 600 = 0.75. Ratios are rounded to 2 decimal places.
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