On the basis of following information, answer the questions:
| Particulars | Amount (₹) |
| Inventory | 1,00,000 |
| Total current assets | 1,60,000 |
| Shareholders funds | 4,00,000 |
| 13% debentures | 3,00,000 |
| Current liabilities | 1,00,000 |
| Net profit before tax | 3,51,000 |
| Cost of revenue from operations | 5,00,000 |
On the basis of above case, the liquid ratio is:
Answer & explanation
Correct answer: option 2
The correct answer is option 2- 0.6:1.
Liquid assets = Current assets - Inventory
= 1,60,000 - 1,00,000
= ₹60,000
Liquid ratio = Liquid assets/ Current liabilities
= 60,000/1,00,000
= 0.6:1