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Question
Calculate Current Ratio from the following:
Working Capital ₹ 4,80,000; Trade Payables ₹ 2,00,000 and Bank Overdraft ₹ 40,000.
Numerical
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Solution
Current Liabilities = Trade Payables + Bank Overdraft
= ₹ 2,00,000 + ₹ 40,000
= ₹ 2,40,000
Current Assets = Working Capital + Current Liabilities
Current Assets = ₹ 4,80,000 + ₹ 2,40,000
Current Assets = ₹ 7,20,000
Current Ratio = `"Current Assets"/"Current Liabilities"`
= `(₹ 7,20,000)/(₹ 2,40,000)`
= 3 : 1
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