Handa Limited has stock of Rs. 20,000. Total liquid assets are Rs. 1,00,000 and quick ratio is 2 : 1, Calculate current ratio.

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Solution

Quick Ratio = 2 : 1
Let Current Liabilities = x

Then Quick Assets = 2x
or 1,00,000 = 2x;
x = $\frac{1, 00, 000}{2}$ = Rs. 50,000

Current Assets = Quick Assets + Stock

= Rs. 1,00,000 + Rs. 20,000 = Rs. 1,20,000

Current Ratio = $\frac{R s . 1, 20, 000}{R s . 50, 000}$ = 2.4 : 1

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Handa Limited has stock of Rs. 20,000. Total liquid assets are Rs. 1,00,000 and quick ratio is 2 : 1, Calculate current ratio.

Quick Ratio = 2 : 1 Let Current Liabilities = x Then Quick Assets = 2x or 1,00,000 = 2x; x = 1,00,0002 = Rs. 50,000 Current Assets = Quick Assets + Stock = Rs. 1,00,000 + Rs. 20,000 = Rs. 1,20,000 Current Ratio = Rs. 1,20,000Rs. 50,000 = 2.4 : 1

Quick Ratio = 2 : 1
Let Current Liabilities = x

Then Quick Assets = 2x
or 1,00,000 = 2x;
x = $\frac{1, 00, 000}{2}$ = Rs. 50,000

Current Assets = Quick Assets + Stock

= Rs. 1,00,000 + Rs. 20,000 = Rs. 1,20,000

Current Ratio = $\frac{R s . 1, 20, 000}{R s . 50, 000}$ = 2.4 : 1