Read the information carefully and answer the questions.
| Particulars | Amount (₹) |
| Inventories | 50,000 |
| Trade Receivables | 50,000 |
| Advance Tax | 4,000 |
| Cash and Cash Equivalents | 30,000 |
| Trade Payables | 1,00,000 |
| Bank overdraft | 4,000 |
Current Ratio of the firm is:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → 1.29:1
The current ratio compares current assets with current liabilities, so it shows how many rupees of short-term assets stand behind every rupee of short-term obligations.
Current Ratio = Current Assets ÷ Current Liabilities
Current Assets = Rs. 50,000 + Rs. 50,000 + Rs. 4,000 + Rs. 30,000 = Rs. 1,34,000
Current Liabilities = Rs. 1,00,000 + Rs. 4,000 = Rs. 1,04,000
Current Ratio = Rs. 1,34,000 ÷ Rs. 1,04,000 = 1.29:1
NCERT (2026-27 edition):
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