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Accounting Ratios 3.27
Illustration 20.
Current Assets of a company are ` 17,00,000. Its Current Ratio is 2.5 and Liquid Ratio is
0.95. Calculate Current Liabilities and Inventory.
Current Assets
Solution: Current Ratio =
Current Liabilities
` 17,00,000
2.5 =
Current Liabilities
Current Liabilities = ` 6,80,000
Quick Assets
Quick Ratio =
Current Liabilities
Quick Assets
0.95 =
` 6,80,000
Quick Assets = ` 6,46,000
Inventory = Current Assets – Quick Assets
= ` 17,00,000 – ` 6,46,000 = ` 10,54,000
Thus, Current Liabilities = ` 6,80,000 and Inventory = ` 10,54,000.
Illustration 21.
Following is the Balance Sheet of X Ltd. as at 31st March, 2024:

Particulars Note No. `
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital 20,00,000
(b) Reserves and Surplus 1 9,00,000
2. Non-Current Liabilities
Long-term Borrowings (10% Loan) 10,00,000
3. Current Liabilities 15,00,000
Total 54,00,000
II. ASSETS
1. Non-Current Assets
Property, Plant and Equipment and Intangible Assets:
(i) Property, Plant and Equipment 25,00,000
(ii) Intangible 4,00,000
2. Current Assets
(a) Inventories 10,00,000
(b) Trade Receivables 10,00,000
(c) Cash and Cash Equivalents 5,00,000
Total 54,00,000
Note to Accounts
Particulars `
1. Reserves and Surplus
(a) General Reserve 3,00,000
(b) Surplus, i.e., Balance in Statement of Profit & Loss 6,00,000
9,00,000
Surplus, i.e., Balance in Statement of Profit & Loss includes profit of ` 5,00,000 for the
current year.
Compute Return on Capital Employed.