Question

A company’s financial position shows: • Current Assets: ₹1,00,000 • Current Liabilities: ₹50,000 The company settles ₹20,000 of its accounts payable by making a cash payment. Based on the above transaction, what will be the revised current ratio, and how is it impacted?

A 2.00 : 1 (No change)
B 2.50 : 1 (Ratio improves)
C 2.67 : 1 (Ratio improves)
D 1.80 : 1 (Ratio deteriorates)
E 1.60 : 1 (Ratio deteriorates)
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