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Accounting Ratios — Accountancy STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceAccountancyAccounting Ratios3 Marks
Question
From the following particulars compute the Current Ratio:
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Answer

Current Ratio $=\frac{\text{Current Assets}}{\text{Current Liabilities}}$
Current Assets = Inventory + Trade Receivables + Current Investments + Cash and Cash Equivalents.
= ₹ 70,000 + ₹ 90,000 + ₹ 35,000 + ₹ 5,000
= ₹ 2,00,000
Current Liabilities = Trade Payables + Short term Borrowings + Provision for Tax + Outstanding Expenses.
= ₹ 46,000 + ₹ 20,000 + ₹ 10,000 + ₹ 4,000
= ₹ 80,000
Current Ratio $=\frac{₹\ 2,00,000}{₹\ 80,000}=2.5:1$

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