A company has annual sales of ₹150 lakh entirely on credit. It keeps an average inventory sufficient to meet sales demand for half a month and gives its customers one month credit. Its average current liabilities are ₹10
CS Executive · Cost and Management Accounting · PYQS · December 2016
A company has annual sales of ₹150 lakh entirely on credit. It keeps an average inventory sufficient to meet sales demand for half a month and gives its customers one month credit. Its average current liabilities are ₹10 lakh. The company must maintain cash and bank balance to have current ratio of 2. The amount of cash balance will be —
Answer & Explanation:
Correct Answer: Option (A)
Official answer key: (A).
Topics: Financial Management
Related Questions in this Topic
- Net fixed assets plus working capital is equal to :
- Market price of a share having a face value of ₹10 is ₹40. The profits available for equity shareholders are ₹2,00,000. ...
- Raman company has issued 13% debentures for ₹10,00,000 in cash at par. The impact of this item:
- A retail store makes 30% of its sales for cash and the remainder on credit. Due to faulty credit collection practice, th...
- EBIT/Total assets ratio is: