Question

Why loose tools and stores and spares are not included in current assets while calculating current ratio ?


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Answer 1

Loose tools, stores and spares are not included in Current Assets while calculating Liquidity Ratios because they are not held with the purpose ofConversion into Cash and Cash Equivalents.

but while doing ratio chapter we doesn't take it as a part of current assets

only raw material +work in progess+finished are only considered.

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