Calculate the Current Ratio from the following information: | Particulars | (Rs.) | |---|---| | Inventories | 50,000 | | Trade receivables | 50,000 | | Advance tax | 4,000 | | Cash and cash equivalant | 30,000 | | Trade payables | 1,00,000 | | Short-term borrowings (bank overdraft) | 4,000 |

Calculate the Current Ratio from the… - CUET UG 2025 Accountancy PYQ

CUET UG 2025 — Accountancy Financial Statements

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Calculate the Current Ratio from the following information:

Particulars	(Rs.)
Inventories	50,000
Trade receivables	50,000
Advance tax	4,000
Cash and cash equivalant	30,000
Trade payables	1,00,000
Short-term borrowings (bank overdraft)	4,000

Official previous-year question

Held on 30 May 2025 · Verified 13 Jul 2026.

Current Ratio measures the relationship between current assets and current liabilities.

Formula: Current Ratio = $\frac{\text{Current Assets}}{\text{Current Liabilities}}$

Calculation of Current Assets:

Inventories + Trade receivables + Advance tax + Cash and cash equivalent

= 50,000 + 50,000 + 4,000 + 30,000 = Rs. 1,34,000

Note: Advance tax is a current asset as it represents a payment made in advance that will be adjusted against tax liability.

Calculation of Current Liabilities:

Trade payables + Short-term borrowings (bank overdraft)

= 1,00,000 + 4,000 = Rs. 1,04,000

Current Ratio:

= $\frac{1,34,000}{1,04,000}$ = 1.288 = 1.29:1 (rounded to two decimal places)

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