Question

X Ltd has a liquid ratio of 7:3 If it's stock is 25000 and it's current liabilities are 75000, find out the current ratio (accounting ratio) ​

Answer 1

answer 2.6:1

Liquid ratio is CA - Stock / CL

LR 7:3

CL 75000

CA-stock = 75000/3 × 7

CA- 25000= 175000

CA = 200000

Current ratio = CA / CL

200000/ 75000

2.6:1

Answer 2

Current ratio

Explanation:

Given:

Current ratio = ?

Stock = 25,000

Liquid ratio = 7 : 3

Current liabilities = 75,000

Computation:

Liquid ratio = (Current assets - Stock) / Current liabilities

7 / 3  = (Current assets - 25,000 ) / 75,000

525,000 = 3 Current assets - 75,000

3 Current assets = 600,000

Current assets = 200,000

Current ratio = Current assets / Current liabilities

Current ratio = 200,000 / 75,000

Current ratio = 8 : 3

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