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Question : A company’s Current assets are Rs.5,00,000 and its current liabilities are Rs.3,00,000. Subsequently, it paid Rs.1,00,000 to its trade payables. What will be the current ratio?

Option 1: 1.66:1

Option 2: 2:1

Option 3: 1.2:1

Option 4: None of the above


Team Careers360 23rd Jan, 2024
Answer (1)
Team Careers360 24th Jan, 2024

Correct Answer: 2:1


Solution : Current Asset = 500000 - 100000 (Cash paid) = 4,00,000
Current Liability = 3,00,000 - 1,00,00 = 2,00,000
Current ratio = Current Asset / Current Liability = 4,00,000/2,00,000 = 2:1
Hence option 2 is the correct answer.

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