Q. 8 DK Goel Accounting Ratios Solutions Class 12 CBSE (2024-25)

the solutions of Question number 8 of Accounting Ratios chapter 5 of DK Goel Class 12 CBSE (2024-25)

Calculate Current Ratio from the following:
Working capital ₹ 1,92,000; Long-term Debt ₹ 80,000 and Total Debt ₹ 2,00,000.

[Ans. 2.6 : 1]

Solution:-

$\mathbf{C}\mathbf{u}\mathbf{r}\mathbf{r}\mathbf{e}\mathbf{n}\mathbf{t} \mathbf{R}\mathbf{a}\mathbf{t}\mathbf{i}\mathbf{o} = \frac{\mathbf{C}\mathbf{u}\mathbf{r}\mathbf{r}\mathbf{e}\mathbf{n}\mathbf{t} \mathbf{A}\mathbf{s}\mathbf{s}\mathbf{e}\mathbf{t}\mathbf{s}}{\mathbf{C}\mathbf{u}\mathbf{r}\mathbf{r}\mathbf{e}\mathbf{n}\mathbf{t} \mathbf{L}\mathbf{i}\mathbf{a}\mathbf{b}\mathbf{i}\mathbf{l}\mathbf{i}\mathbf{t}\mathbf{i}\mathbf{e}\mathbf{s}}$

$\mathbf{C}\mathbf{u}\mathbf{r}\mathbf{r}\mathbf{e}\mathbf{n}\mathbf{t} \mathbf{R}\mathbf{a}\mathbf{t}\mathbf{i}\mathbf{o} = \frac{\mathbf{3}\mathbf{,}\mathbf{12,000}}{\mathbf{1}\mathbf{,}\mathbf{20,000}}$

Current Ratio = 2.6 : 1

Current Liabilities = Total Debt – Long-term Debt

Current Liabilities = ₹ 2,00,000 – ₹ 80,000

Current Liabilities = ₹ 1,20,000

Working Capital = Current Assets – Current Liabilities

Current Assets = Working Capital + Current Liabilities

Current Assets = ₹ 1,92,000 + ₹ 1,20,000

Current Assets = ₹ 3,12,000