Which ratio is considered as safe margin of solvency?
Liquid ratio
Quick ratio
Current ratio
None of these
Current ratio is considered as safe margin of solvency.
Liquidity ratios are computed as the ratio of ____________ to the current liabilities.
Following is the Balance Sheet of Title Machine Ltd. as on March 31, 2006.
Liabilities
Amount
Rs
Assets
Amount Rs
Equity Share Capital
24,000
Buildings
45,000
8% Debentures
9,000
Stock
12,000
Profit and Loss
6,000
Debtors
Bank Overdraft
Cash in Hand
2,280
Creditor
23,400
Prepaid Expenses
720
Provision for Taxation
600
69,000
Calculate Current Ratio and Liquid Ratio.