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4 cards from this section. Quick, good the night before a test.
What is the formula for the current ratio?
Remember to include only current assets and liabilities.
What does the quick ratio indicate?
Think about what quick assets are.
What does the liquidity ratio assess?
Focus on the short-term aspect of financial stability.
True or False: A debt-equity ratio higher than 1 indicates a company is primarily financed by debt.
Think about the implications of high debt financing.
Given a company with Current Assets of ₹500,000, Inventory of ₹100,000, Current Liabilities of ₹250,000, calculate both the Current Ratio and Quick Ratio.
Remember to extract the quick assets from total current assets for quick ratio.
A company has long-term debt of ₹600,000 and total equity of ₹400,000. Calculate the debt-equity ratio and comment on its financial health.
Think about what a ratio greater than 1 indicates regarding leverage.
5 more questions in this section. Enroll free to practise them all.
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