From the following inforniation, calculate current ratio
Calculate 'Laquidity Ratio from the following information
17M]
Current habilities Rs. 50,000
Current assets Rs. 80,000
Inventories Rs. 20,000
Advance tax Rs. 5,000
Prepaid expenses - Rs. 5,000
Current Ratio = Current Assets / Current Liabilities
Current Assets = Rs. 80,000
Current Liabilities = Rs. 50,000
Current Ratio = 80,000 / 50,000
Current Ratio = 1.6
From the given information, we can calculate the Liquidity Ratio:
Liquidity Ratio = (Current Assets - Inventories - Advance Tax - Prepaid Expenses) / Current Liabilities
Liquidity Ratio = (80,000 - 20,000 - 5,000 - 5,000) / 50,000
Liquidity Ratio = 50,000 / 50,000
Liquidity Ratio = 1
Therefore, the Current Ratio is 1.6 and the Liquidity Ratio is 1.