Cash Balance Rs15 000 Trade Receivables Rs35 000 Inventory Rs40 000 Trade PayablesRs24 000 and Bank ...........

Cash Balance Rs15,000; Trade Receivables Rs35,000; Inventory Rs40,000; Trade PayablesRs24,000 and Bank Overdraft is Rs6,000. Current Ratio will be :

3.75 : 1

3 : 1

1 : 3

1 : 3.75

- Current Ratio is a measure of a company's ability to pay its short-term liabilities with its short-term assets.

- Current Assets include:

- Cash Balance: Rs15,000

- Trade Receivables: Rs35,000

- Inventory: Rs40,000

- Total Current Assets: Rs90,000

- Current Liabilities include:

- Trade Payables: Rs24,000

- Bank Overdraft: Rs6,000

- Total Current Liabilities: Rs30,000

- Current Ratio Formula: Current Assets / Current Liabilities

- Calculation: Rs90,000 / Rs30,000 = 3 : 1

- Option 1: 3.75 : 1

- Option 2: 3 : 1

- Option 3: 1 : 3

- Option 4: 1 : 3.75

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