Calculate current ratio from the following information : ? Equity share capital $\displaystyle 8,00,000$ Inventories $\displaystyle 1,00,000$ Trade Receivables $\displaystyle 1,20,000$ Advance Tax $\displaystyle 24,000$ Cash and Cash equivalents $\displaystyle 56,000$ Trade Payables $\displaystyle 60,000$ Short term borrowings (Bank overdraft) $\displaystyle 40,000$ $\displaystyle 10$% Investments $\displaystyle 80,000$

Current Assets = Inventories + Trade Receivables + Advance Tax + Cash and Cash Equivalents = ₹$\displaystyle 1,00,000$ + ₹$\displaystyle 1,20,000$ + ₹$\displaystyle 24,000$ + ₹$\displaystyle 56,000$ = ₹$\displaystyle 3,00,000$ ……………………………………………………. $\displaystyle 1$ Current Liabilities = Trade Payables + Short Term borrowings = ₹$\displaystyle 60,000$ + ₹$\displaystyle 40,000$ = ₹$\displaystyle 1,00,000$ ………………………………………………………. $\displaystyle 1$ Current Ratio = Current assets/ Current Liabilities …………………………..……. ½ = ₹$\displaystyle 3,00,000$/ ₹$\displaystyle 1,00,000$ = $\displaystyle 3$:$\displaystyle 1$ …………………………………………………………………. ½