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:

Pure Discount Loan

A loan where the borrower receives a sum of money upfront and repays a higher amount at the end of the loan period, effectively paying interest by the difference.

Lump Sum Payment

An isolated financial disbursement occurring once, instead of being divided into multiple payments over a duration.

Annual Interest Payments

Periodic payments made to bondholders, typically annually, that represent the interest earned on the investment.

Effective Annual Rate

The real return on an investment, taking into account the effect of compounding interest over a year.