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      Question

      Champion Ltd. define following data for calculating

      Current Ratio: Current Assets Rs.20,00,000 , Inventories Rs.10,00,000 , Working Capital Rs.12, 00,000.
      A 3.5 : 1 Correct Answer Incorrect Answer
      B 2.5 : 1 Correct Answer Incorrect Answer
      C 1 : 1 Correct Answer Incorrect Answer
      D 1 : 2 Correct Answer Incorrect Answer
      E 1.5 : 1 Correct Answer Incorrect Answer

      Solution

      Working capital = Current asset – Current Liability 1200000 = 20,00,000- current liability CL = 800000 CR = 2000000/800000 = 2.5 times

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