Question

Working capital ₹ 6,00,000 , total debt ₹27,00,000 , non-current liabilities ₹24,00,000 . Calculate current ratio.

Answer 1

Answer:

Current Ratio = 3:1

Explanation:

Total Debt = ₹27,00,000

Non-current Liabilities = ₹24,00,000

So, Current Liabilities = ₹27,00,000 - ₹24,00,000

= ₹3,00,000

Working capital = ₹6,00,000

Accordingly,

Current Asset - Current Liabilities = ₹6,00,000

Or, Current Assets - ₹3,00,000 = ₹6,00,000

Or, Current Assets = ₹9,00,000

Current Ratio = Current Assets/Current Liabilities

= ₹9,00,000/₹3,00,000

= 3:1