# Question 19 Chapter 4 of +2-B – USHA Publication 12 Class Question 19 Chapter 4 of +2-B

I. Liquidity Ratios

19. (Maintaining Lower Current Ratio than Existing) The ratio of Current Assets (₹ 10,00,000) to Current Liabilities (₹ 4,00,000) is 2.5 : 1. The accountant of this firm is interested in maintaining a current ratio of 2 : 1 by acquiring some part of current assets on credit. You are required to suggest him the amount of current assets which must be acquired for this purpose.

## The solution of Question 19 Chapter 4 of +2-B: –

 Current Ratio = 1.5 : 1 Let assume Current Assets acquired = ₹ x New Current Assets = ₹ 10,00,000 + x New Current Liabilities = ₹ 4,00,000 + x
 Current Liabilities = Current Assets Current Liabilities
 2: 1 = ₹ 10,00,000 + x ₹ 4,00,000 + x
 ₹ 10,00,000 + x = (₹ 4,00,000 –x) x 2 ₹ 10,00,000 + x = ₹ 8,00,000 + 2x 2x – x = ₹ 10,00,000 – ₹ 8,00,000 x = ₹ 2,00,000 Current Assets = ₹ 2,00,000

What are Liquidity Ratios – Formulas and Examples

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Also, Check out the solved question of previous Chapters: –