Advertisements
Advertisements
Question
From the following calculate: (i) Current Ratio; and (ii) Quick Ratio:
| ₹ | ₹ | ||
| Total Debt | 6,00,000 | Long-term Borrowings | 2,00,000 |
| Total Assets | 8,00,000 | Long-term Provisions | 2,00,000 |
| Fixed Assests (Tangible) | 3,00,000 | Inventories | 95,000 |
| Non-current Investment | 50,000 | Prepaid Expenses | 5,000 |
| Long-term Loans and Advances | 50,000 |
Sum
Advertisements
Solution
(i) Current Ratio
Current Assets = Total Assets - Fixed Assets - Non-Current Investment - Long term Loans and Advances
= 800000 - 300000 - 50000 - 50000 = Rs 400000
Current Liabilities = Total Debt - Non-Current Liabilities
= 600000 - 200000 - 200000 = Rs 200000
`"Current Ratio" = "Current Assets"/ "Current liability"`
`= 400000/200000 = 2 : 1`
(ii) Quick Ratio
Quick Assets = Current Assets - Stock - Prepaid Expenses
= 400000 - 95000 - 5000 = Rs 300000
`"Quick Ratio" = "Quick Assets"/"Current Liabilities"`
`= 300000 / 200000 = 1.5 : 1`
shaalaa.com
Is there an error in this question or solution?
