Question
Calculate the current ratio based on above information?
Refer to the following information to answer the next 4 questions (Q1 to Q4)Solution
Current Ratio = Current assets/current liabilities Current assets = stock + debtors + investments (short term) + cash in hand = 12,000 + 12,000 + 4000 + 12,000 = 40,000 Current liabilities = creditors + bank overdraft + provision for taxation = 16,000 + 4000 + 4000 + 4000 = 28,000 Current Ratio = 40,000/28,000 = 1.43
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