On the basis of following data the liquid ratio of a company will be Current Ratio 5 3 Current Liabi...........

On the basis of following data, the liquid ratio of a company will be : Current Ratio 5 : 3; Current Liabilities Rs75,000 and Inventory Rs25,000

1 : 1

2:1.8

3 : 2

4 : 3

- Current Ratio is the total current assets divided by current liabilities, given as 5:3.

- Current Assets = 5/3 × Rs 75,000 = Rs 125,000.

- Inventory is not included in liquid assets and is given as Rs 25,000.

- Liquid Assets = Current Assets - Inventory = Rs 125,000 - Rs 25,000 = Rs 100,000.

- Liquid Ratio = Liquid Assets / Current Liabilities.

- Liquid Ratio = Rs 100,000 / Rs 75,000 = 4:3.

- Option 1: 1:1 - This option doesn’t match the calculations.

- Option 2: 2:1.8 - Incorrect based on the given data.

- Option 3: 3:2 - Doesn’t align with the derived liquid ratio.

- Option 4: 4:3 - Matches perfectly with the calculated liquid ratio.

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