Financial ratios

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Akhil Jain

Akhil Jain (Querist)
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26 September 2015 Can quick ratio exceed current Ratio?

Amol S Joglekar

Amol S Joglekar (Expert)
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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.

Akhil Jain

Akhil Jain (Querist)
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27 September 2015 how can debtor balance be negative?

Amol S Joglekar

Amol S Joglekar (Expert)
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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.

Akhil Jain

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

Amol S Joglekar

Amol S Joglekar (Expert)
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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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