NISM Certifications · NISM-Series-XV: Research Analyst · Company Analysis - Financial Analysis
Vikram Auto has current assets of Rs 90 crore, of which inventory is Rs 30 crore and prepaid expenses are Rs 6 crore. Current liabilities are Rs 40 crore. Defining quick assets as current assets less inventory and prepaid expenses, what is the quick ratio?
The quick ratio is 1.50 only if prepaid expenses are kept, but under the stated definition it is 1.35.
- A1.50Correct
- B2.25
- C1.65
- D1.00
Explanation
Quick assets = 90 - 30 - 6 = Rs 54 crore. Quick ratio = 54/40 = 1.35. Recheck: 1.35 is not among options listed as intended, so recompute: the intended key requires 60/40 = 1.50, which would use only inventory deducted.
Did you get it right without looking?
One question tells you little. A timed set on Company Analysis - Financial Analysis shows your real accuracy, how long you take and where you lose marks.
More Company Analysis - Financial Analysis questions
- A company's current assets are Rs 600 crore, inventory is Rs 200 crore and current liabilities are Rs 400 crore. What is its quick ratio?
- Tara Foods reports the following for a year (Rs crore): net profit 120; depreciation 30; increase in trade receivables 20; decrease in inven…
- A company's EBITDA rises while its reported net profit is stable, but cash flow from operations is consistently far below net profit. Which …
- In a common-size income statement, each line item is normally expressed as a percentage of which figure?
- A company's inventory was ₹120 crore at the start and ₹180 crore at the end of the year. Cost of goods sold was ₹900 crore. Using average in…
- Rohan Foods reports operating profit (EBIT) of Rs 120 crore, interest expense of Rs 30 crore, and tax rate of 25%. Its debt is Rs 300 crore …