Cash Balance Rs5,000; Trade Payables Rs40,000; Inventory Rs50,000; Trade Receivables Rs65,000 and Prepaid Expenses are Rs10,000. Liquid Ratio will be.......

1.75 : 1

* Current Assets = Cash + Inventory + prepaid expenses + trade receivables
                        = 5,000+50,000+10,000+65,000= 130,000

* Quick assets = Current Assets-Inventory-prepaid expenses
  Quick assets = 130000 - 50000 - 10000
                       = ₹70000
* Current Liabilities = Trade payables of ₹40,000

Thus, Liquid ratio = Quick assets / Current liabilities
                            =  70000/40000
                            = 1.75 :1