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Question
A company had Current Assets of ₹ 3,00,000 and Current Liabilities of ₹ 1,50 000, having a Current Ratio of 2:1. What will be the company's revised Current Ratio after it collects ₹ 20,000 cash from its debtors of ₹ 25,000, the remaining debtors being bad?
Options
2.56 : 1
2.03 : 1
2.13 : 1
1.97 : 1
Solution
1.97 : 1
Explanation:
Current Assets = ₹ 3,00,000
Current Liabilities = 1,50,000
New current assets = 3,00,000 - 25,000 + 20,000 = ₹ 2,95,000
New current ratio = `"Current Assets"/"Current Liabilities"`
`= (2,95,000)/(1,50,000)`
= 1.97 : 1
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