Trade Receivables 40,000; Trade Payables Rs60,000; Prepaid Expenses Rs10,000; Inventory Rs1,00,000 and Goodwill is Rs15,000. Current Ratio will be :
Answer & explanation
Correct answer: option 3
Current Assets = Trade Receivables + Prepaid Expenses + Inventory
= 40,000+10,000+1,00,000
=1,50,000
Current Liabilities = Trade Payables
= 60,000
Current Ratio = 1,50,000/60,000
= 2.5:1