Question
Trade Payables are ₹50,000, Working Capital is
₹18,00,000, and Current Liabilities are ₹6,00,000. Calculate the Current Ratio.Solution
The Current Ratio is calculated using the formula: Current Ratio = Current Assets / Current Liabilities Calculation of Current Assets: Working Capital = Current Assets - Current Liabilities Current Assets = Current Liabilities + Working Capital Current Assets = ₹6,00,000 + ₹18,00,000 = ₹24,00,000 Current Liabilities: Given as ₹6,00,000 Current Ratio = ₹24,00,000 / ₹6,00,000 = 4 : 1
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