Calculate Current ratio and quick ratio from the following information.
Stock Rs. 50,000, Debtors Rs. 40,000, Bills receivable Rs. 10,000. Advance Tax Rs. 4,000. Co
Rs. 30,000, Creditors Rs. 60,000, Bills payable Rs. 40,000, Bank over draft Rs. 4,000
Answers
Answer:
Current Ratio = 67:52
Quick Ratio = 21 : 26
Explanation:
Current Assets = stock + debtors + bill receivable + Advance tax + cash
= 50000 + 40000 + 10000 +4000 + 30000
= 134000
Current Liabilities = creditors + bill payable + bank overdraft
= 60000 + 40000 + 4000
= 104000
Quick Assets = Current assets - stock - prepaid expenses
= 134000 - 50000
= 84000
Current Ratio = current assets / current liability
= 134000 /104000
= 67/52
Quick Ratio = Quick assets / current liability
= 84000 / 104000
= 21/ 26