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Financial ratios

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26 September 2015 Can quick ratio exceed current Ratio?

26 September 2015 It is a very rare instance.
Just to stretch the imagination to NEGATIVE extreme : current asset consists of CASH and -ve DEBTORS balance.

27 September 2015 how can debtor balance be negative?




27 September 2015 That is a rare situation. In seller's market, the sales are effected with 100% advance. In such a case, the balance can be negative.

27 September 2015 But debtors are included both in quick and current ratio, so how can quick ratio be greater than current ratio?

28 September 2015 All debtors are NOT included in both?

There is a convention of including debtors only upto 90 days of age



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