Use the following to answer the given question,
\(\begin{array}{c|c} & ₦ \\ \hline Premises & 100,000 \\ Plant & 50,000\\ Fixtures & 30,000\\ Stock & 2,000 \\ Debtor & 10,000\\ Cash & 10,000\\ Creditors & 20,000 \end{array}\)
Current ratio is
- 4 : 1
- 3 : 1
- 2 : 1
-
1 : 1
The correct answer is: D
Explanation
Current ratio is calculated by dividing your current assets by your current liabilities.
current assets = stock + debtors + cash
2,000 + 10,000 + 10,000 = 22,000
\(\frac{22,000}{20,000}\) = 1.1