6 :- Working Capital is Rs 18,00,000; Trade Payables Rs 1,80,000; and other current liabilities are Rs 4,20,000. Calculate Current Ratio.
Solution :-
Current Liabilities = Trade Payables + Other Current Liabilities
= 1,80,000 + 4,20,000
= Rs 6,00,000
Working Capital = Current Assets – Current Liabilities
18,00,000 = Current Assets – 6,00,000
Current Assets = 18,00,000 + 6,00,000
Current Assets = Rs 24,00,000
Current Ratio = Current Assets/Current Liabilities
= 24,00,000/6,00,000
= 4 : 1