This question required candidates to calculate a target quick ratio and a target sales to net working capital ratio.

Many candidates gained good marks on this question.

Better answers used the target information provided to calculate revised values for cost of sales, inventory, trade payables, current assets and current liabilities, before calculating the required quick ratio and sales to net working capital ratio. Central to these calculations was the target current ratio of 1.4 times, which allowed current liabilities to be found once current assets had been calculated.