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Question
A Company’s Current Assets are ₹ 8,00,000 and its current liabilities are ₹ 4,00,000. Subsequently, it purchased goods for ₹ 1,00,000 on credit. Current ratio will be ______.
Options
2 : 1
2.25 : 1
1.8 : 1
1.6 : 1
MCQ
Fill in the Blanks
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Solution
A Company’s Current Assets are ₹ 8,00,000 and its current liabilities are ₹ 4,00,000. Subsequently, it purchased goods for ₹ 1,00,000 on credit. Current ratio will be 1.8 : 1.
Explanation:
Initial Current Assets = ₹ 8,00,000
Initial Current Liabilities: ₹ 4,00,000
When goods are purchased for ₹ 1,00,000 on credit:
Current Assets = 8,00,000 + 1,00,000
= ₹ 9,00,000
Current Liabilities = 4,00,000 + 1,00,000
= ₹ 5,00,000
Current Ratio = `"Current Assets"/"Current Liabilities"`
= `(9,00,000)/(5,00,000)`
= 1.8 : 1
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