Read the following information and answer the question.
Following is the Balance Sheet of Titanic Ltd. as at March 31, 2022.
| Particulars | Amount (₹) |
| 1. Shareholder's Fund a) Share Capital b) Reserves & Surplus |
24,00,000 6,00,000 |
| 2. Non-current liabilities Long-term borrowings |
9,00,000 |
| 3. Current liabilities a) Short term borrowings b) Trade Payables c) Short-term Provisions |
6,00,000 23,40,000 60,000 |
| Total | 69,00,000 |
| II. Assets 1)Non-Current Assets a) Fixed assets b) Tangible assets |
45,00,000 |
| 2. Current Assets a) Inventories b) Trade Receivables c) Cash and Cash equivalent d) Short-term loans & advances |
12,00,000 9,00,000 2,28,000 72,000 |
| Total | 69,00,000 |
Current Ratio for Titanic Ltd. for the year ended March 31, 2022 will be:
Answer & explanation
Correct answer: option 1
The correct answer is option 1- 0.8:1.
Current Assets = Inventories + Trade Receivables + Cash and Cash equivalent + Short-term loans & advances
= 12,00,000 + 9,00,000 + 2,28,000 + 72,000
= 24,00,000
Current liabilities = Short term borrowings + Trade Payables + Short-term Provisions
= 6,00,000 + 23,40,000 + 60,000
= 30,00,000
Current ratio = CA/CL
= 24,00,000/30,00,000
= 0.8:1