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Question
Calculate Current Ratio from the following:
Working Capital ₹ 1,92,000; Long-term Debt ₹ 80,000; and Total Debt ₹ 2,00,000.
Numerical
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Solution
Current Liabilities = Total Debt − Long term Debt
= ₹ 2,00,000 − ₹ 80,000
= ₹ 1,20,000
Current Assets = Working Capital + Current Liabilities
= ₹ 1,92,000 + ₹ 1,20,000
= ₹ 3,12,000
Current Ratio = `"Current Assets"/"Current Liabilities"`
= `(₹ 3,12,000)/(₹ 1,20,000)`
= 2.6 : 1
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