Following is the balance sheet of Lakshmi Ltd. as on 31st March, 2019:

1.	Following is the balance sheet of Lakshmi Ltd. as on 31st March, 2019:Calculate: (i) Current ratio (ii) Quick ratio
Answer» (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

Following is the balance sheet of Lakshmi Ltd. as on 31st March, 2019:Calculate: (i) Current ratio (ii) Quick ratio

Answer»

(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