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Question
Trade Receivables ₹ 40,000; Trade Payables ₹ 60,000; Prepaid Expenses ₹ 10,000; Inventory ₹ 1,00,000 and Goodwill is ₹ 15,000. Current Ratio will be ______.
Options
1 : 2
2 : 1
2.33 : 1
2.5 : 1
MCQ
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Solution
Trade Receivables ₹ 40,000; Trade Payables ₹ 60,000; Prepaid Expenses ₹ 10,000; Inventory ₹ 1,00,000 and Goodwill is ₹ 15,000. Current Ratio will be 2.5 : 1.
Explanation:
Current Assets = Trade Receivables + Inventory + Prepaid Expenses
= ₹ 40,000 + ₹ 1,00,000 + ₹ 10,000
= ₹ 1,50,000
Current Liabilities = Trade Payables = ₹ 60,000
Current Ratio = `"Current Assets"/"Current Liabilities"`
= `(₹ 1,50,000)/(₹ 60,000)`
= 2.5 : 1
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