Question
When a company's current ratio stands at 2:1, indicating
it has double the amount of current assets as liabilities, how does purchasing goods on credit affect this financial metric?Solution
Say for example we have current asset of Rs. 200 & current liabilities of Rs. 100 as a result the current ratio is 2:1, now suppose if we are purchasing goods on credit worth Rs. 50. This will result in increase in current asset by Rs. 50 (Inventory purchased) & also increase in current liability by Rs. 50 (Creditors increased). Now the new current ratio is 250/150 i.e., 1.66. hence the ratio has decreased.
In the question below there are four statements followed by three conclusions I, II and III. You have to take the four given statements to be true eve...
Statements: a. All spoons are forks.
b. All plates are forks.
c. All forks are bowls.
Conclusion...
Statements:
Only a few A is B
No B is C
Only a few C is D
Some D is E
Conclusions:
I). Â No A is C
In the question below some statements are given followed by three conclusions I, II, and III. You have to take the given statements to be true even if ...
Given below are three statements and three conclusions. Take the statements to be true even if they are at variance with commonly known facts, and decid...
Statements-
Some pens are sharpeners
All sharpeners are erasers
No eraser is ink
Some inks are pencil
Conclusions.<...
Statements: All pens are papers.
Some papers are not books.
All books are pencils.
Conclusions...
In the question below three statements are given followed by two conclusions. You have to take the given statements to be true even if they seem to be ...
Statements:
All clubs are pub.
No pub is a song.
All songs are music.
Conclusions:
I. All songs being...
Statements:
All Books are Flight.
Only a few Flight are Ticket.
No Ticket is a Memo.
Conclusions:
I. Some Fligh...
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