Get complete step-by-step solutions for T.S. Grewal Class 12 Vol 3 2025-2026 - Chapter 4 - Accounting Ratios. Study double-entry system details, practice timed problems, and verify answers directly.
Calculate Current Ratio from the following information:
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| Equity Share Capital | 8,00,000 | Cash and Cash Equivalents | 56,000 |
| Inventories | 1,00,000 | Trade Payables | 60,000 |
| Trade Receivables | 1,20,000 | Short-term Borrowings (Bank Overdraft) | 40,000 |
| Advance Tax | 24,000 | 10% Investments | 80,000 |
(CBSE 2024)
Total Current Assets = Cash and Cash Equivalents + Inventories + Trade Receivables + Advance Tax
Total Current Assets = ₹56,000 + ₹1,00,000 + ₹1,20,000 + ₹24,000 = ₹3,00,000
Total Current Liabilities = Trade Payables + Short-term Borrowings
Total Current Liabilities = ₹60,000 + ₹40,000 = ₹1,00,000
Current Ratio = Current Assets ÷ Current Liabilities = ₹3,00,000 ÷ ₹1,00,000 = 3:1
Note: Equity Share Capital and the 10% Investments are not current items (the investments are treated as Non-Current, since nothing indicates otherwise), so neither enters the Current Ratio calculation.
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