Explanation:

A company’s Current assets are Rs3,00,000 and its current liabilities are Rs2,00,000. Subsequently, it paid Rs50,000 to its trade payables.

Current ratio = current assets/ current liabilities

=         Rs.3,00,000 - Rs.50,000(cash)        

   Rs.2,00,000 - Rs.50,000(trade payables) 

=Rs.2,50,000

  Rs. 1,50,000

current ratio = 1.67:1