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3.6 Analysis of Financial Statements—CBSE XII

Solved Questions

Illustration 1.
From the following Balance Sheet of Warmex Ltd. as at 31st March, 2024, calculate Current Ratio:

Particulars Note No. `

I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital 5,00,000
(b) Reserves and Surplus (50,000)
2. Non-Current Liabilities
Long-term Borrowings 2,75,000
3. Current Liabilities
(a) Short-term Borrowings 2,50,000
(b) Trade Payables 50,000
(c) Short-term Provisions 75,000
Total 11,00,000
II. ASSETS
1. Non-Current Assets
(a) Property, Plant and Equipment and Intangible Assets:
(i) Property, Plant and Equipment 4,50,000
(ii) Intangible Assets 50,000
(b) Non-current Investments 50,000
2. Current Assets
(a) Current Investments 1,00,000
(b) Inventories 1,50,000
(c) Trade Receivables 1,75,000
(d) Cash and Cash Equivalents 1,25,000
Total 11,00,000

Solution:

Current Assets
Current Ratio =
Current Liabilities

` 5,50,000
= = 1.47 : 1.
` 3,75,000
Current Assets = Current Investments + Inventories + Trade Receivables + Cash and
Cash Equivalents
= ` 1,00,000 + ` 1,50,000 + ` 1,75,000 + ` 1,25,000 = ` 5,50,000.

Current Liabilities = Short-term Borrowings + Trade Payables + Short-term Provisions
= ` 2,50,000 + ` 50,000 + ` 75,000 = ` 3,75,000.