Question

cash balance 15000,Trade receivables 35000, Inventory 40000,Trade payables 24000 and bank overdraft is 6000Then current ratio will be?​

Answer 1

Hey there!

Current ratio = $\frac{Current Assets}{Current Liabilities}$

                      = $\frac{Cash + T. Receivable + Inventory}{T. Payable + Bank overdraft}$

                      = $\frac{15000+35000+40000}{24000+6000}$

                      = $\frac{90000}{30000}$

             

                      = $\frac{9}{3}$       or  = $\frac{3}{1}$     or    3:1

     

Hope it help