A business has current assets of Rs. 240,000 and current liabilities of Rs. 160,000. What is its current ratio?
Correct answer: B. 1.50:1
- A. 0.67:1
- B. 1.50:1
- C. 1.25:1
- D. 2.00:1
Explanation
The current ratio is calculated by dividing current assets by current liabilities. Rs. 240,000 divided by Rs. 160,000 gives 1.50, expressed as 1.50:1.
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About Financial Statements
Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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