Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting Ratios

Question:

On the basis of following information, answer the questions:

Particulars Amount (₹)
Inventory 100000
Total current assets 160000
Shareholders funds 400000
13% debentures 300000
Current liabilities 100000
Net profit before tax 351000
Cost of revenue from operations 500000

 

On the basis of above case, the liquid ratio is:

Options:

1:1

0.6:1

2:1

1:0.6

Correct Answer:

0.6:1

Explanation:

Liquid assets = Current assets - Inventory
                      = 160000 - 100000
                      = ₹60000

Liquid ratio = Liquid assets/ Current liabilities
                  = 60000/100000
                  = 0.6:1