Question

Following is the Balance Sheet of Raj Oil Mills Limited as at March 31, 2017. Calculate Current Ratio.

Particulars	(Rs)
I. Equity and Liabilities:
1. Shareholders’ funds
a) Share capital	7,90,000
b) Reserves and surplus	35,000
2. Current Liabilities
a) Trade Payables	72,000
Total	8,97,000
II. Assets
1. Non-current Assets
a) Fixed assets
Tangible assets	7,53,000
2. Current Assets
a) Inventories	55,800
b) Trade Receivables	28,800
c) Cash and cash equivalents	59,400
Total	8,97,000

Answer 1

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

                          = `"1,44,000"/"72,000"`

                          = `2 : 1`

Current Assets = Inventories + Trade Receivables + Cash

= 55,800 + 28,800 + 59,400

= Rs. 1,44,000

Current Liabilities = Trade Payables = Rs 72,000