From the following informations, compute the current
ratio :
`
Sundary debtors 2,50,000
Cash at Bank 60,000
Sundry creditors 80,000
Stock (closing) 80,000
Bills payable 40,000
Prepaid expenses 20,000
Outstanding expenses 80,000
Short term Investment 40,000
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Explanation:
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
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