Tough Business Questions 2

A business has a current ratio of 0.8 : 1

What does this mean.

• For every £1 of current assets they have £0.80 of current liabilities.

• For every £1 of current liabilities they have £0.80 of current assets.

• For every £1 of current assets less inventories they have £0.80 of current liabilities.

• For every £1 of current liabilities they have £0.80 of current assets less inventories.

A business has a acid-test ratio of 1.3 : 1

What does this mean.

• For every £1 of current assets they have £1.30 of current liabilities.

• For every £1 of current liabilities they have £1.30 of current assets.

• For every £1 of current assets less inventories they have £1.30 of current liabilities.

• For every £1 of current liabilities they have £1.30 of current assets less inventories.

A business has a Acid Test ratio of 0.9 : 1

What does this mean.

• For every £1 of current assets they have £0.90 of current liabilities.

• For every £1 of current liabilities they have £0.90 of current assets.

• For every £1 of current assets less inventories they have £0.90 of current liabilities.

• For every £1 of current liabilities they have £0.90 of current assets less inventories.

A Business Has The Following:

Fixed Assets = £30,000

Current Assets = £12,000

Inventory = £9,000

Current Liabilities = £8,000

Calculate It's Acid Test Ratio

• 0.66 : 1

• 0.38 : 1

• 0.26 : 1

• 0.75 : 1

• 0.88 : 1

A Business Has The Following:

Fixed Assets = £12,050

Current Assets = £13,500

Inventory = £6,040

Current Liabilities = £7,000

Calculate It's Current Ratio

• 1.52 : 1

• 1.16 : 1

• 2.45 : 1

• 1.93 : 1

• 0.58 : 1

A business has a current of 0.8 : 1

What does this mean.

• For every £1 of current assets they have £0.80 of current liabilities.

• For every £1 of current liabilities they have £0.80 of current assets.

• For every £1 of current assets less inventories they have £0.80 of current liabilities.

• For every £1 of current liabilities they have £0.80 of current assets less inventories.

A Business Has The Following:

Fixed Assets = £30,000

Current Assets = £12,000

Inventory = £9,000

Current Liabilities = £8,000

Calculate It's Current Ratio

• 1 : 1

• 2 : 1

• 3 : 1

• 1.25 : 1

• 1.5 : 1

A Business Has The Following:

Fixed Assets = £200,050

Current Assets = £45,500

Inventory = £8,150

Current Liabilities = £15,000

Calculate It's Acid-Test Ratio

• 2.89 : 1

• 0.4 : 1

• 1.82 : 1

• 2.49 : 1

• 1.33 : 1

A Business Has The Following:

Fixed Assets = £12,050

Current Assets = £13,500

Inventory = £6,040

Current Liabilities = £7,000

Calculate It's Acid-Test Ratio

• 1.07 : 1

• 1.11 : 1

• 0.93 : 1

• 1.02 : 1

• 0.99 : 1

Which of the following items are not included in a cash budget?

• Gain on sale of asset

• Cash sales

• Payment received from debtors

• Interest received from the bank