Current Ratio = Current Assets / Current liabilities
Before payment of Rs 10,000 to creditors
= Cash / Creditors
= Rs 1,50,000 / Rs 75,000
= 2 : 1
After payment of Rs 10,000 to creditors
Current Ratio = Cash / Creditors
= (Rs 1,50,000 – Rs 10,000) / (Rs 75,000 – Rs 10,000)
= 2.15 : 1
Hence, it can be observed that the current ratio has increased from 2 : 1 to 2.15 : 1