$000
Sales revenue
20,000
Cost of sales
(17,000)
Distribution costs
(600)
Administrative expenses
(400)
Net interest
(300)
Taxation
(1,000)
Dividends
(200)
Non-current assets
Current assets
Inventories
5,000
Prepaid Expenses
1,500
Trade receivables
3,000
Cash and bank
500
Current liabilities
Bank overdraft
1,650
Trade payables
6,000
1,000
Dividend (proposed)
200
Non-current liabilities
Loan
Equity
Ordinary shares
4,000
Share premium account
4,650
Retained earnings
11,500
Required:
Calculate the Acid Test Ratio
Select one:
a.
0.8
b.
0.6
c.
1
d.
0.39
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