Question

Sunshine Ltd. had a Cunent Ratio of 08 : 1; its Current Assets being ₹ 2,00,000 and Current Liabilities being ₹ 2,50,000.

What will be the revised Current Ratio of Sunshine Ltd. after it dishonors one of its Bills Payable of ₹ 30,000?

Answer 1

The revised current ratio of Sunshine Ltd. will be 0.71 : 1. Initially, the company had current assets of ₹ 2,00,000 and liabilities of ₹ 2,50,000, resulting in a current ratio of 0.8. The dishonor of a bill payable of ₹ 30,000 increases the current liabilities to ₹ 2,80,000, but the current assets remain unchanged at ₹ 2,00,000.