Question

Based on the following information of a company as at 31 March, 2017, what will be the Current Ratio of the company?

• A. 16 times
• B. 2.6 : 1
• C. 2 : 1
• D. 1.6 : 1

Hint:

Current ratio shows liquidity position by comparing current assets to current liabilities.

Answer 1

The Correct Option is D

Step 1: Understanding Current Ratio
The Current Ratio is calculated as \(\text{Current Assets}\) divided by \(\text{Current Liabilities}\).
Step 2: Calculation
Provided values:
Current Assets \(= \rupee 1,60,000\),
Current Liabilities \(= \rupee 1,00,000\).
\[ \text{Current Ratio} = \frac{1,60,000}{1,00,000} = 1.6 : 1. \]