Calculate the Current Ratio from the following information:ParticularsValue (Rs.)Inventories50,000Trade receivables50,000Advance tax4,000Cash and cash - Accountancy MCQ CUET Accountancy 2025 30 May Shift 2 2026 | ExamTest.live

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Calculate the Current Ratio from the following information:ParticularsValue (Rs.)Inventories50,000Trade receivables50,000Advance tax4,000Cash and cash equivalent30,000Trade payables1,00,000Short-term borrowings (bank overdraft)4,000

Solution & Step-by-step Explanation

The formula for Current Ratio is: Current Ratio = \frac{Current Assets}{Current Liabilities} Identify and calculate Current Assets: Current Assets = Inventories + Trade Receivables + Advance Tax + Cash and cash equivalents Current Assets = 50, 000 + 50, 000 + 4, 000 + 30, 000 = Rs. 1, 34, 000 Identify and calculate Current Liabilities: Current Liabilities = Trade Payables + Short-term borrowings (Bank Overdraft) Current Liabilities = 1, 00, 000 + 4, 000 = Rs. 1, 04, 000 Calculate the ratio: Current Ratio = \frac{1 , 34 , 000}{1 , 04 , 000} = \frac{134}{104} \approx 1.288 : 1 ⟹ 1.29 : 1

Try it yourself before checking the explanation above.

Calculate the Current Ratio from the following information:ParticularsValue (Rs.)Inventories50,000Trade receivables50,000Advance tax4,000Cash and cash equivalent30,000Trade payables1,00,000Short-term borrowings (bank overdraft)4,000

1.24:1

1.33:1

1.29:1

1.19:1

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