Section C (4 Mark)

Section C (4 Mark)

Zoya Ltd has the following Balance sheet for FY 2005-2006:

The Total Sales for the year was Rs. 6,00,000.

The company president believes the company carries excess inventory. Accordingly he wants the inventory turnover ratio to be 8x and would use the freed up cash to reduce current liabilities.

If the company follows the president’s recommendation and sales remain the same, the new quick ratio would be:
A . 2.4
B . 3
C . 4.5
D . 1.2

View Answer

Answer: B