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Question
| ₹ | ₹ | |
| Inventory (including loose tools ₹ 20,000) | 1,00,000 | |
| Trade Receivables | 3,20,000 | 3,00,000 |
| Less: Provision | 20,000 | |
| Cash and Cash Equivalents | 60,000 | |
| Trade Payables | 1,70,000 | |
| Cash Credit from Bank | 20,000 | |
| Outstanding Rent | 10,000 |
Liquid Ratio will be:
Options
2 : 1
2.2 : 1
1.8 : 1
1.9 : 1
MCQ
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Solution
1.8 : 1
Explanation:
Liquid Ratio = `"Liquid Assets"/"Current Liabilities"`
Liquid Assets = Trade Receivables + Cash & Cash Equivalents
= 3,00,000 + 60,000
= ₹ 3,60,000
Current Liabilities = Trade Payables + Cash Credit + Outstanding Rent
= 1,70,000 + 20,000 + 10,000
= ₹ 2,00,000
Liquid Ratio = `(3,60,000)/(2,00,000)`
= 1.8 : 1
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