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Following is the Balance Sheet of Title Machine Ltd. as at March 31,2015.

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Calculate Current Ratio and Liquid Ratio.

Current ratio = \(\frac {\textit{Current assets}}{\textit{Current liabilities}} \)

=\(\frac{24,00,000}{30,00,000}\) = 0.8 :1

Current Assets = Inventories + Trade Receivables + Cash + Short term Loans and Advances

= 12,00,000+ 9,00,000+ 2,28,000+ 60,000 = Rs. 24,00,000

Current Liabilities = Trade Payables + Short-term Borrowing + Short-term Provisions

= 23,40,000 + 6,00,000 = 60,000 = Rs.30,00,000

2. Quick Ratio

Liquid ratio = \(\frac {\textit{Liquid assets}}{\textit{Current liabilities}} \)

\(\frac {\textit{12,00,00}}{\textit{30,00,000}} \)= 0.4:1

Quick Assets = Trade Receivables + Cash + Short term Loans and Advances, 

= 9,00,000 + 2,28,000 + 72,000 = Rs. 12,00,000

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