Practice Liquidity Ratios - 1.4.1 | ICSE Class 12 Accounts – Chapter 5: Ratio Analysis | ICSE Class 12 Accounts
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Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

Define the Current Ratio.

💡 Hint: Think about what current assets and liabilities refer to.

Question 2

Easy

What are quick assets?

💡 Hint: Recall which assets are excluded in the Quick Ratio.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What does the Current Ratio measure?

  • A company's long-term viability
  • A company's ability to cover short-term obligations
  • A company's profitability

💡 Hint: Relate it back to liquidity.

Question 2

True or False: A Quick Ratio of less than 1 indicates strong liquidity.

  • True
  • False

💡 Hint: Think about what a Quick Ratio entails.

Solve 1 more question and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A business has current assets of ₹500,000, current liabilities of ₹300,000, inventory of ₹150,000, and prepaid expenses of ₹25,000. Calculate the Current Ratio and Quick Ratio.

💡 Hint: Apply the relevant formulas for each ratio carefully.

Question 2

Consider a scenario where a company has a High Current Ratio (4:1) but a Low Quick Ratio (0.5:1). Discuss what this could indicate about the company's financial health.

💡 Hint: Think about how inventory affects liquidity.

Challenge and get performance evaluation