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      Question

      VG Ltd shared the following details from its Balance

      sheet at the end of the year. What is its Current Ratio? 
      A 1.99 Correct Answer Incorrect Answer
      B 1.85 Correct Answer Incorrect Answer
      C 1.71 Correct Answer Incorrect Answer
      D 0.94 Correct Answer Incorrect Answer
      E 0.81 Correct Answer Incorrect Answer

      Solution

      Current Ratio (CR) = Current Assets/ Current Liabilities Current Assets: Cash + Accounts Receivables + Inventory  =100,000 + 900,000 + Rs.10,00,000 = Rs. 20,00,000 Current Liabilities: Bank Overdraft + Trade Creditors =Rs. 900,000 + 180,000 = Rs. 10,80,000 As such Current Ratio = 20,00,000/1080000 = 1.85

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