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Management Accounting




                    Notes                                  Figure 4.3: Quick/Liquid Asset Ratio

























                                       !

                                     Caution   Standard norm of the ratio:
                                     The ideal norm is 1:1 which means that one rupee of current liabilities is matched with one
                                     rupee of quick assets.

                                   4.3.3 Super Quick Assets Ratio

                                   It is the ratio which establishes the relationship in between the super quick assets and quick
                                   liabilities of the fi rm.

                                   The super quick assets are nothing but the current assets which can be more easily converted into
                                   cash to meet out the quick liabilities.
                                   The super quick liabilities are the current liabilities should have to be met out at faster pace
                                   within shorter span in duration.
                                                      Super Quick Assets = Cash + Marketable Securities
                                                    Super Quick Liabilities = Current Liabilities — Bank Overdraft

                                                  Super Quick Assets Ratio  =  Super Quick Assets
                                                                        Super Quick Liabilities

                                       !

                                     Caution   Standard norm of the ratio:
                                     Higher the ratio, better is the position of the fi rm.


                                          Example: From the following calculate current ratio:
                                                                                                     `
                                   Current Assets:
                                   Cash in Hand                                                   4,00,000
                                   Sundry Debtors                                                 1,60,000
                                                                                                          Contd…



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