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Question
Calculate Current Ratio from the following information:
| Particulars | ₹ | Particulars | ₹ |
| Total Assets | 12,00,000 | Non-Current Investments | 1,40,000 |
| Land and Building | 6,00,000 | Shareholder’s Funds | 8,50,000 |
| Machinery | 1,00,000 | Non-Current Liabilities | 1,10,000 |
Numerical
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Solution
Current Ratio = `"Current Assets"/"Current Liabilities"`
Current Assets = Total Assets − Land & Buildings − Machinery − Non-Current Investments
= ₹ 12,00,000 − ₹ 6,00,000 − ₹ 1,00,000 − ₹ 1,40,000
= ₹ 3,60,000
Current Liabilities = Total Assets (liabilities) − Shareholder Funds − Non-Current Liabilities
= ₹ 12,00,000 − ₹ 8,50,000 − ₹ 1,10,000
= ₹ 2,40,000
Current Ratio = `(₹ 3,60,000)/(₹ 2,40,000)`
= 1.5 : 1
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