Question

calculate current ratio and liquid ratio on the basis of following information
cash 300000
debtor 100000
stock 150000
bill receivable 70000
prepaid expenses 10000
creditor 120000
bill payable 70000
provision of tax 15000
outstanding expenses 2000
trade investment 10000
bank overdraft 100000
machinery 300000​

Answer 1

Current assets = Stock + Debtors +BR + Advance tax + Cash
= 100000 + 80000 + 20000 + 8000 + 60000
= 268000
Current Liabilities = Creditors + BP + Bank OD
= 120000 + 80000 + 8000
= 208000
Quick assets = Current assets - stock
= 268000 - 100000
= 168000
Current ratio = Current Assets / Current Liabilities
= 268000/208000
= 1.28
Quick ratio = Quick assets / Current Liabilities
= 168000/200000
= 0.84