Question

Following is the Balance Sheet of Rohit and Company as on March 31, 2006. $\begin{array}{cccc}\text{Capital and Liabilities}& \text{Amt. (Rs.)}& \text{Assets}& \text{Amt. (Rs.)}\\ \text{Share Capital}& \text{1,90,000}& \text{Fixed Assets}& \text{1,53,000}\\ \text{Reserves}& \text{12,500}& \text{Stock}& \text{55,800}\\ \text{Profit and Loss}& \text{22,500}& \text{Debtors}& \text{28,800}\\ \text{Bills Payables}& \text{18,000}& \text{Cash at Bank}& \text{59,400}\\ \text{Creditors}& \text{54,000}& & \\ & \overline{\underset{–}{2,97,000}}& & \overline{\underset{–}{2,97,000}}\end{array}$

Calculate Current Ratio.

Answer 1

Current Ratio = $\frac{CurrentAssets}{CurrentLiabilities}$

Current Assets = Stock + Debtors + Cash at Bank

= Rs. (55,800 + 28,800 + 59,400)

= Rs. 1,44,000

Current Liabilities = Bill Payable + Creditors

= Rs. (18,000 + 54,000)

= Rs. 72,000

So, Current Ratio = $\frac{1,44,000}{72,000}=\frac{2}{1}$ = 2 : 1