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Question
What is meant by 'Liquidity of Business'?
Solution
Liquidity of business refers to the ability of a business to meet its immediate and short term obligations.
RELATED QUESTIONS
The current ratio of X. Ltd is 2:1. State with reason which of the following transaction would
i. Increase or ii. decrease or iii. not change the ratio
1. Included in the trade payables was a bills payable of Rs.9,000 which was met on maturity.
2. Company issued 1,00,000 equity shares of Rs.10 each to the Vendors of machinery purchased.
O.M. Ltd has a Current Ratio of 3.5 : 1 and Quick Ration of 2 : 1. If the excess of Current Assets over Quick Assets as represented by Stock is Rs 1,50,000, calculate Current Assets and Current Liabilities.
A business has a current ratio of 3 : 1 and quick ratio of 1.2 : 1. If the working capital is Rs 1,80,000, calculate the total Current Assets and value of stock.
From the given information calculate the Stock turnover ratio. Sales Rs 2,00,000; G.P: 25% on cost; Stock at the beginning is 1/3 of the stock at the end which was 30% of sales.
Which of the following is not included in cash and cash equivalents?
Liquid assets = ______.
A decrease in Outstanding Expenses would result in:
A Company's Current Liabilities decreased from ₹ 12,00,000 to ₹ 9,00,000. What is the percentage of change in Current Liabilities?
______ is included in current assets while preparing balance sheet as per revised Schedule III but excluded from current assets while calculating Current Ratio.
State with reason whether Provision for Doubtful Debts is subtracted from Trade Receivables while computing Current Ratio.
Calculate Debt to Total Assets Ratio of Moonlight Ltd. (up-to two decimal places) from the following information:
| Particulars | (₹) |
| Property, Plant & Equipment and Intangible Assets | 20,00,000 |
| Shares of XYZ Bank Ltd. | 1,00,000 |
| Long-term Loans and Advances | 1,00,000 |
| Current Assets | 10,00,000 |
| Current Liabilities | 4,00,000 |
| Total Debt | 12,00,000 |
Calculate Quick Ratio (up-to two decimal places) from the following information:
| Particulars | (₹) |
| Total Current Assets | 90,000 |
| Working Capital | 60,000 |
| Prepaid Expenses | 30,000 |
What is the difference between Total Assets and Current Liabilities?
A company has a Quick Ratio of 1.8 : 1. Mention whether this ratio will improve/reduce/not change after it sells a machine worth ₹ 1,20,000 at a loss of ₹ 30,000.
Calculate the Current Ratio (up-to two decimal places) of Windlas Biotech Ltd. from the following extract of its Annual Report of 2021-22.
| Particulars | (₹) (in millions) |
| Opening Inventory of consumables (raw materials) | 264.79 |
| Closing Inventory of consumables (raw materials) | 389.85 |
| Opening Inventory of finished goods and work-in-progress | 149.82 |
| Closing Inventory of finished goods and work-in-progress | 197.24 |
| Current Assets (other than inventory of consumables and of finished goods and work-in-progress) | 3,229.23 |
| Current Liabilities | 936.52 |
From the following particulars of NB Ltd., calculate its Cost of Revenue from Operations for the year 2023-24.
| Particulars | |
| Current Assets | ₹ 6,80,000 |
| Current Liabilities | ₹ 3,40,000 |
| Quick Ratio | 1.5 : 1 |
| Inventory Turnover Ratio | 4 times |
