Current Liabilities of a company were rs 80,000 and its current ratio was 2 5:1 It purchased goods for - Accountancy - Accounting Ratios

Question

Current Liabilities of a company were rs 80,000 and its current
ratio was 2 5:1 It purchased goods for rs 40,000 on credit
Calculate the revised current ratio

Arjita Bhadauria · Accepted Answer

Dear Student

Current ratio = Current Assets/ Current Liability
Current Assets = Current Ratio × Current Liability
=80000×2 5 = 200,000

Purchased goods for Rs40000 on credit
New Current Asset = 200000 + 40000 = 240000
New Current Liabilities = 80000 + 40,000 = 120000

New Current Ratio = New Current Asset/ New Current Liabilities
= 240,000/120000 = 2
New Current Ratio= 2:1

Regards

Current Liabilities of a company were rs 80,000 and its current ratio was 2.5:1. It purchased goods for rs 40,000 on credit. Calculate the revised current ratio.