Cash Balance ₹15,000; Trade Receivables ₹35,000; Inventory ₹40,000; Trade Payables ₹24,000 and Bank Overdraft is ₹6,000. Current Ratio will be:
Answer & explanation
Correct answer: option 2
The correct answer is option 2- 3:1.
Current Assets = Cash Balance ₹15,000 + Trade Receivables ₹35,000 + Inventory ₹40,000
= ₹90,000
Current Liabilities = Trade Payables ₹24,000 + Bank Overdraft ₹6,000
= 30,000
Current Ratio = 90,000/30,000
= 3:1