Page 71 - afs12

Accounting Ratios 4.25
3. Inventories
Materials 3,25,000 1,50,000
Stock-in-trade 1,75,000 1,00,000
Finished Goods 1,50,000 1,50,000
Loose Tools 1,00,000 50,000
7,50,000 4,50,000
4. Trade Receivables
Sundry Debtors 6,00,000 2,25,000
Bills Receivable 1,50,000 25,000
7,50,000 2,50,000
Solution:
Current Ratio 31st March, 2025 31st March, 2024
Current Assets ` 17,00,000 ` 8,50,000
=  =
Current Liabilities ` 7,00,000 ` 3,50,000
= 2.43 : 1 = 2.43 : 1

Working Note: ` `
Current Assets = Inventories (Excluding Loose Tools) +
Trade Receivables + Cash and Cash Equivalents
2025 = ` 6,50,000 + ` 7,50,000 + ` 3,00,000 17,00,000
2024 = ` 4,00,000 + ` 2,50,000 + ` 2,00,000 8,50,000
Current Liabilities = Short-term Borrowings + Trade Payables + Short-term Provisions
2025 = ` 2,00,000 + ` 3,50,000 + ` 1,50,000 7,00,000
2024 = ` 1,50,000 + ` 1,50,000 + ` 50,000 3,50,000

Illustration 19.
Following is the Balance Sheet of Total Care Ltd. as at 31st March, 2025. You are required
to calculate Current Ratio for the two years.

BALANCE SHEET
as at 31st March, 2025
Particulars Note 31st March, 31st March,
No. 2025 (`) 2024 (`)
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital 5,00,000 5,00,000
(b) Reserves and Surplus 2,50,000 2,00,000
2. Non-Current Liabilities
Long-term Borrowings 7,50,000 5,00,000
3. Current Liabilities
(a) Short-term Borrowings 1 1,00,000 75,000
(b) Trade Payables 2 2,50,000 2,00,000
Total 18,50,000 14,75,000