From the following data, calculate current Ratio:
Liquid Assets 37500, Inventories 10000, Prepaid Expenses 2500, Working capital 30000.

Explanation

Current Ratio =`("Current Assets")/("Curretn Liabilities")=(Rs 50000)/(Rs 20000)=2.5:1`
Current Assets =Liquid Assets +Inventories +Prepaid Expenses
=Rs 37500+Rs 10000+Rs 2500=Rs 50000
Working capital =Current Assets-Current Liabilities
Current Liabilities =Curren Assets -Working Capital
=Rs 50000-Rs 30000=Rs 20000.