Question

Direction (14 -17):- Study the Balance Sheet below to answer the questions below:

Calculate the current Ratio from the above data:

A 2.6 times Correct Answer Incorrect Answer
B 2.8 times Correct Answer Incorrect Answer
C 3.0 times Correct Answer Incorrect Answer
D 3.4 times Correct Answer Incorrect Answer
E 3.6 times Correct Answer Incorrect Answer

Solution

Current ratio = current assets/current liabilities                         = (inventories + trade receivables + cash) /trade payables                         = (4,00,000 + 9,00,000 + 5,00,000) /5,00,000                         = 3.6 times

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