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Question
Vibgyor Ltd. has current assets worth ₹ 3,50,000 and it needs to pay off its obligations worth ₹ 2,00,000. If the firm has to make a payment of a current liability worth ₹ 50,000, what will be the current ratio?
Options
3 : 1
0.75 : 1
1 : 1
2 : 1
MCQ
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Solution
2 : 1
Explanation:
Initial Current Assets = ₹ 3,50,000
Payment = ₹ 50,000
New Current Assets = 3,50,000 − 50,000
= ₹ 3,00,000
Initial Current Liabilities = ₹ 2,00,000
Payment = ₹ 50,000
New Current Liabilities = 2,00,000 − 50,000
= ₹ 1,50,000
Current Ratio = `"Current Assets"/"Current Liabilities"`
= `(3,00,000)/(1,50,000)`
= 2 : 1
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