Calculate Current Ratio from the following information:
| Particulars | Amount (₹) |
| Inventories | 60,000 |
| Trade Receivables | 60,000 |
| Advance Tax | 4,000 |
| Cash and Cash Equivalents | 50,000 |
| Trade Payables | 1,30,000 |
| Bank overdraft | 4,000 |
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → 1.30:1
Current ratio = Current assets ÷ Current liabilities. Advance tax is a current asset, and a bank overdraft is a short-term borrowing, so it is a current liability.
Current Assets = Rs. 60,000 + Rs. 60,000 + Rs. 4,000 + Rs. 50,000
= Rs. 1,74,000
Current Liabilities = Rs. 1,30,000 + Rs. 4,000
= Rs. 1,34,000
Current Ratio = Rs. 1,74,000 ÷ Rs. 1,34,000
= 1.298, that is 1.30:1
NCERT (2026-27 edition):
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