ABC Company reports the following information: cash Rs.40,000, marketable securities Rs.30,000, accounts receivable Rs.70,000, inventory Rs.50,000, and current liabilities Rs.1,20,000. Calculate the quick ratio of the company. Show the calculation step by step.

Step-by-step solution

1. Identify the components of quick assets: cash, marketable securities and receivables.
2. Compute quick assets: $40000+30000+70000=140000$.
3. Divide quick assets by current liabilities: $140000÷120000=1.1667\approx 1.17$.
4. Hence the quick ratio is 1.17.

Concept tested: Working‑capital sub‑ratio

Published 28 September 2026 · How this solution was prepared and checked