Practice Quick Ratio (Acid-Test Ratio) - 1.4.1.2 | ICSE Class 12 Accounts – Chapter 5: Ratio Analysis | ICSE Class 12 Accounts
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1.4.1.2 - Quick Ratio (Acid-Test Ratio)

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Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What is the formula for the Quick Ratio?

💡 Hint: Remember, Quick Assets exclude inventory.

Question 2

Easy

What does a Quick Ratio of 1 signify?

💡 Hint: Think about how that reflects a company's ability to pay short-term debts.

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 a Quick Ratio of less than 1 indicate?

  • The company has enough quick assets to cover liabilities.
  • The company may struggle to meet its short-term obligations.
  • The company's inventory is too high.

💡 Hint: Think about what the ratio measures.

Question 2

True or False: The Quick Ratio always indicates the full liquidity position of a company.

  • True
  • False

💡 Hint: Consider what other factors might affect a company's liquidity.

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Challenge Problems

Push your limits with challenges.

Question 1

Given the following information for Company X: Current Assets = ₹200,000, Current Liabilities = ₹80,000, and Inventory = ₹50,000. Determine the Quick Ratio and discuss its implications.

💡 Hint: Calculate Quick Assets first, then use the formula.

Question 2

Company Y has a Quick Ratio of 0.9. What steps can the management take to improve its liquidity? Discuss potential strategies.

💡 Hint: Think about operational changes and financial strategies.

Challenge and get performance evaluation