Question
A company’s Balance Sheet includes: Equity ₹25 lakh, 10% Debentures ₹10 lakh, Land ₹20 lakh, Plant & Machinery ₹10 lakh, Inventory ₹5 lakh, Trade Receivables ₹5 lakh, and Cash ₹10 lakh. Based on this, calculate the Current Ratio.
Solution
Current Assets = Inventory + Receivables + Cash = ₹20 lakh; Current Liabilities = ₹15 lakh; CR = 20/15 = 1.3
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