why we exclude bank overdradt from liquid liabilities in liquid ratio
and it is included in super liquid ratio?
1 Replies
(Guest)
as per AS-3 we consider bank od as sources of finance and take it into the financing activities so while calculating the liquid ratio we exclude it. but while calculating the super ratio we take it because super ratio means the items which are readily availble or convertable in cash say more than liquid ratio and bank od reduce our such ability so we take bank od while calculating super ratio.
alternatively you can assume bank of as current liability and take it in both i.e. quick ratio and suepr quick ratio.
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