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Cost and Management Accounting
Notes
!
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.
11.3.3 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
Super Quick Assets Ratio =
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
Stock 2,40,000
Current Liabilities:
Sundry Creditors 3,00,000
Bills Payable 1,00,000
Solution:
Current Assets ` 8,00,000
Current Ratio = = = 2
Current Liabilities ` 4,00,000
Self Assessment
Fill in the blanks:
5. Current assets ratio establishes the relationship in between the ...................... and current
liabilities.
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