Question

from the following information given by a company from its books of accounts as on 31-3-2018:
particular. rs
total current assets. 1,60,000
Inventories. 1,00,000
shareholders fund. 4,00,000
3% Debentures. 3,00,000
current liabilities. 1,00,000
cost of revenue from. 5,00,000
operation
calculate:
a) current ratio
b) liquid ratio
c) debt equity ratio​

Answer 1

Answer:8:5; 3:5; 4:3

Explanation:a) 160000/100000

16/10 = 8:5. b) 60000/100000 = 6/10 = 3:5 c) 400000/ 300000 = 4:3.

Answer 2

Given,

• Total current assets. 1,60,000
• Inventories. 1,00,000
• shareholders fund. 4,00,000
• 3% Debentures. 3,00,000
• current liabilities. 1,00,000
• cost of revenue from operation  5,00,000  

To find,

a) current ratio

b) liquid ratio

c) Arrear-equity ratio​

Solution,

We can find the required values by simple accountancy formulas,

1. To find out the current ratio, we must focus on the current asset and the current liabilities.

Given, Current Assets = Rs.1,60,000

           Current Liabilities= Rs.1,00,000

• The formula is Current Assets/ Current Liabilities

⇒ $\frac{160000}{100000}$ = 8:5

    2. To find out the liquid ratio, we must focus on the quick asset and the current liabilities.

Given, Current Assets = Rs.1,60,000, Inventories = Rs.1,00,000

Quick Asset = Current Asset - Inventories= Rs(160000-100000)= Rs.60000                  

           Current Liabilities= Rs.1,00,000

• The formula is Quick Assets/ Current Liabilities

⇒ $\frac{60000}{100000}$ = 3:5

    2. To find out the arrear equity ratio, we must focus on the shareholder's fund and debentures .

Given, Shareholders fund. = Rs. 4,00,000 and Long term Arrear i.e Debentures = Rs. 3,00,0

• The formula = Arrear / Shareholders Fund

⇒$\frac{300000}{400000}$ = 3:4