The Quick Ratio is:
creditors due within a year
This means that cash and nearly-liquid assets are being compared with outstanding invoices. If the ratio is less than 1, it is possible that:
• Additional borrowings are needed to meet financial commitments
Work in progress relates to goods that are in the process of manufacture but have not reached the finished goods stage. Accordingly, it is necessary to value these to take into account the costs incurred up to the stage of production they have reached and to adjust for opening and closing work in progress in the accounts so that an accurate picture can be gleaned of the results to date.
Also, the club has outstanding subscriptions – are these to be included in the Income & Expenditure Account? Do you record expenses in the accumulated fund account or the bank/cash account? Thanks for your help.