Liquidity ratio Quiz 1

Two basic measures of liquidity are :

• Inventory turnover and Current ratio

• Current ratio and Quick ratio

• Gross Profit ratio and Operating ratio

• Current ratio and Average Collection period

Current Ratio is :

• Solvency Ratio

• Liquidity Ratio

• Activity Ratio

• Profitability Ratio

. Current Ratio is :

• Liquid Assets/Current Assets

• Fixed Assets/Current Assets

• Current Assets/Current Liabilities

• Liquid Assets/Current Liabilities

Liquid Assets do not include :

• Bills Receivable

• Debtors

• Inventory

• Bank Balance

Ideal Current Ratio is :

• 1 : 1

• 1 : 2

• 1 : 3

• 2 : 1

Working Capital is the :

• Cash and Bank Balance

• Capital borrowed from the Banks

• Difference between Current Assets and Current Liabilities

• Difference between Current Assets and Fixed Assets

Current assets include only those assets which are expected to be realised within ……………………..

• 3 months

• 6 months

• 1 year

• 2 years

The ………………… of a business firm is measured by its ability to satisfy its short term obligations as they become due.

• Activity

• Liquidity

• Debt

• Profitability

Ideal Quick Ratio is :

• 1 : 1

• 1 : 2

• 1 : 3

• 2 : 1

Quick Assets do not include

• Cash in hand

• Prepaid Expenses

• Marketable Securities

• Trade Receivables