CUET UG 2025 — Accountancy Financial Statements

Current Ratio = $\frac{\text{Current Assets}}{\text{Current Liabilities}}$Current LiabilitiesCurrent Assets​

Verifying the given current ratio: $\frac{50,000}{20,000}$20,00050,000​ = 2.5 : 1 ✓

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Let the reduction in current assets be Rs. $x$x

After reduction:

• New Current Assets = 50,000 - $x$x
• Current Liabilities = 20,000 (remains unchanged)
• Desired Current Ratio = 2 : 1

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Setting up the equation:

$$\frac{50,000 - x}{20,000} = \frac{2}{1}$$20,00050,000−x​=12​

Cross-multiplying:

50,000 - $x$x = 2 × 20,000

50,000 - $x$x = 40,000

$x$x = 50,000 - 40,000

$x$x = Rs. 10,000

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Verification:

• New Current Assets = 50,000 - 10,000 = Rs. 40,000
• New Current Ratio = $\frac{40,000}{20,000}$20,00040,000​ = 2 : 1 ✓

The reduction required is Rs. 10,000.