A Company's Quick Ratio is 1.5 : 1; Current Liabilities are Rs2,00,000 and Inventory is Rs1,80,000. Current Ratio will be :
Answer & explanation
Correct answer: option 4
Quick Ratio= (Current Assets-Inventory)/Current Liabilities
1.5/1=(Current Assets- 1,80,000)/2,00,000
1.5/1 x 200000 = Current assets - 180000
300000 = current assets - 180000
Current assets = 300000 + 180000
Current Assets=4,80,000
Current Ratio= 4,80,000/2,00,000
=2.4:1