Loading Tutorstips...
✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
From the following, calculate: (i) Current Ratio; and (ii) Quick Ratio:
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| Total Debt | 12,00,000 | Long-term Borrowings | 4,00,000 |
| Total Assets | 16,00,000 | Long-term Provisions | 4,00,000 |
| Fixed Assets (Tangible) | 6,00,000 | Inventories | 1,90,000 |
| Non-Current Investment | 1,00,000 | Prepaid Expenses | 10,000 |
| Long-term Loans and Advances | 1,00,000 |
(i) Current Ratio
Current Assets = Total Assets − Fixed Assets − Non-Current Investment − Long-term Loans and Advances
= 16,00,000 − 6,00,000 − 1,00,000 − 1,00,000 = ₹8,00,000
Current Liabilities = Total Debt − (Long-term Borrowings + Long-term Provisions)
= 12,00,000 − (4,00,000 + 4,00,000) = ₹4,00,000
Current Ratio = Current Assets ÷ Current Liabilities = 8,00,000 ÷ 4,00,000 = 2:1
(ii) Quick Ratio
Quick Assets = Current Assets − Inventories − Prepaid Expenses
= 8,00,000 − 1,90,000 − 10,000 = ₹6,00,000
Quick Ratio = Quick Assets ÷ Current Liabilities = 6,00,000 ÷ 4,00,000 = 1.5:1
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Vol 3 Chapter 4 Q.35 - Accounting Ratios", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 4 - Accounting Ratios.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
You can take our custom-built interactive practice quiz directly on this page to test your understanding of "T.S. Grewal Class 12 Vol 3 Chapter 4 Q.35 - Accounting Ratios" instantly.