Following is the balance sheet of Lakshmi Ltd. as on 31st March, 2019:
Calculate:
(i) Current ratio (ii) Quick ratio
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Following is the balance sheet of Lakshmi Ltd. as on 31st March, 2019:
Calculate:
(i) Current ratio (ii) Quick ratio
Following is the balance sheet of Lakshmi Ltd. as on 31st March, 2019:
Calculate:
(i) Current ratio (ii) Quick ratio
(i) Current ratio = (Current assets)/(Current libalities)
= 6,00,000/4,00,000
Current ratio = 1.5:1
Current assets = Inventories + Trade debtors + Cash and cash equivalents + other current assets prepaid expenses.
= 40,000 + 1,60,000 + 3,20,000 + 80,000
= 6,00,000
Current Liabilities = short-term loans + trade payables + Expenses payable + short term provision.
= 50,000 + 3,10,000 + 15,000 + 25,000
= 4,00,000
Quick ratio = (Quick assets)/(Current liabilities)
Quick assets = Current assets – Inventory – Prepaid expenses
= 6,00,000 – 1,60,000 – 40,000
= 4,00,000
Quick ratio = 4,00,000/4,00,000
= 1 : 1