Handa Ltd.has inventory of Rs 20,000. Total liquid assets are Rs 1,00,000 and quick ratio is 2:1. Calculate current ratio.-ACCOUNTING RATIO
Handa Ltd.has inventory of Rs 20,000. Total liquid assets are Rs 1,00,000 and quick ratio is 2:1. Calculate current ratio.
Quick Ratio = `\frac{Liquid Asset}{Current Liabilities}`
or, 2 = `\frac{1,00,000}{Current Liabilities}`
or, Current Liabilities
= `\frac{1,00,000}{2}`
= 50,000
Current Asset = Liquid Asset + Inventory
=1,00,000 + 20,000
=1,20,000
Current Asset = `\frac{Current Asset}{Current Liabilities}`
= `\frac{1,20,000}{50,000}`
=`\frac{2.4}{1}`
= 2.4 : 1
Comments
Post a Comment