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      Question

      Calculate Current Ratio Particulars (Rs.)

      Inventories 50,000 Trade receivables 50,000 Advance tax 4,000 Cash and cash equivalents 30,000 Trade payables 1,00,000 Short-term borrowings (bank overdraft) 4,000
      A 1.33: 1 Correct Answer Incorrect Answer
      B 1.29:1 Correct Answer Incorrect Answer
      C 1.5:1 Correct Answer Incorrect Answer
      D 1.6:1 Correct Answer Incorrect Answer
      E 1.75:1 Correct Answer Incorrect Answer

      Solution

      Current Assets/Current Liabilities Current Assets = Inventories + Trade receivables + Advance tax + Cash and cash equivalents = Rs. 50,000 + Rs. 50,000 + Rs. 4,000 + Rs. 30,000 = Rs. 1,34,000 Current Liabilities = Trade payables + Short-term borrowings = Rs. 1,00,000 + Rs. 4,000 = Rs. 1,04,000 Current Ratio =Rs.1,34,000/104000 =1.29:1

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