'X' Ltd. has a liquid ratio of 2:1. If its stock is Rs. 40,000 and its current liabilities are of Rs. 1 Lakh, What will be the current ratio________.

1.4 times

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2.4times

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1.2 times

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3.4 times

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Solution

The correct option is B 2.4times
Liquid Ratio = [Current Assets minus Stock]/ Current Liabilities
2 = [Current Assets - $40000$ ]/ $100000$
$200000$ = Current Assets - $40000$
Therefore Current Assets = $R s .240000$
Now,
Current Ratio = Current assets/Current liabilities
= $240000 / 100000$
= $2.4$ times

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'X' Ltd. has a liquid ratio of 2:1. If its stock is Rs. 40,000 and its current liabilities are of Rs. 1 Lakh, What will be the current ratio________.

The correct option is B 2.4timesLiquid Ratio = [Current Assets minus Stock]/ Current Liabilities 2 = [Current Assets - 40000]/ 100000 200000 = Current Assets - 40000Therefore Current Assets = Rs.240000Now,Current Ratio = Current assets/Current liabilities = 240000/100000 = 2.4 times