Calculate the Quick Ratio from the Following Information of a Manufacturing

question 90

Multiple Choice

Calculate the quick ratio from the following information of a manufacturing firm. Cash in hand = $200,000
Cash at bank = $100,000
Inventories = $100,000.
Current Liabilities = $100,000

• A) 2:1
• B) 1:2
• C) 3:1
• D) 4:1
• E) 2:2

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Definitions:

Decision-Making Authority

The power or right allocated to individuals or groups to make decisions within an organization.

Present Value

The modern-day estimation of future financial gains or sequences of cash influxes, using a particular rate of return for calculation.

Weighted Average

A mean calculated by giving values in a data set more influence according to some attribute of the data, often used in financial calculations like inventory costs and portfolio returns.

Free Cash Flows

Free Cash Flows represent the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.