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Handa Ltd.Has Inventory of Rs 20,000. Total Liquid Assets Are Rs 1,00,000 and Quick Ratio is 2:1. Calculate Current Ratio. - Accountancy

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Question

Handa Ltd.has inventory of Rs 20,000. Total liquid assets are Rs 1,00,000 and quick ratio is 2:1. Calculate current ratio.

Solution

`"Quick Rtaio" = "Liquid Assets"/"Current Liablities"`

Or, `2 = "1,00,000"/"Current Liablities"`

`or, "Current Liablities" = "1,00,000"/2`

                                     = `50,000`

Current Assets = Liquid Assets + Inventory
                        = 1,00,000 + 20,000
                        = 1,20,000

`"Current Ratio" = "Current Assets"/"Current Liablities"`

                           = `"1,20,000"/"50,000"`

                           =`"2.4"/1"="2.4 : 1`

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Solution Handa Ltd.Has Inventory of Rs 20,000. Total Liquid Assets Are Rs 1,00,000 and Quick Ratio is 2:1. Calculate Current Ratio. Concept: Concept of Accounting Ratios.
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