$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	20,000
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
Taxation	1,000
Dividend (proposed)	200
Non-current liabilities
Loan	1,000
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