how to calculate the Current Ratio, Liquid Ratio &
Operating Ratio
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Answer / jagan
1. Current ratio = current assets/ current liayabilities
(Current assets = cash, bank ,stock, Bill recevables
debtors)
(Current Liability = creditors, bank od balance,bills
payables)
2. liquid ratio = Liquid Assets/ Liquid Liabilites
(liquid Assets = All current assets except "Stock")
(Liquid Liabilities = All current liabilities
except "Bank od balance")
3. Operating ratio = Operating exp + cost goods sold /
sales*100
| Is This Answer Correct ? | 36 Yes | 8 No |
current ratio= current assets/current liabilities
current assets= cash in hand,cash in bank, closing
stock,sundry debtors,prepaid expenses
current liabilities= sundry creditors,outstanding
liabilities,prepaid recivable incomes
liquid ratio=current assets/quick liabilities
Operating ratio= Cost of goods sold/Net sales*100
| Is This Answer Correct ? | 14 Yes | 8 No |
Answer / azad khan
if current ratio=2.5 : 1
liquid ratio= 1:1
closing stock=rs 45000
calculate
current assets
current liabilities
liquid assets
| Is This Answer Correct ? | 6 Yes | 1 No |
Answer / gohar ali
operating ratio=cost of goods sold/net sales*100
| Is This Answer Correct ? | 8 Yes | 5 No |
Answer / bindu
Current ratio: current assets / current liabilities
Quick ratio : Quick assets (Current assets - stock) / quick
liabilities (Current liabilities - prepaid expenses)
Operating ratio : Operating expenses / net sales
Operating ratio shows management efficiency of company by
comparing operating expenses with net sales
| Is This Answer Correct ? | 6 Yes | 6 No |
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please answer this question.the following balances were extracted from the books of modern traders on 31st dec,2010.capital(85000)fixed assets(45000)stock1-1-2010(15000)sundry debtors(20600)productive exp(3300)reserves fund(6600)discount received(800)cash in hand(6200)drawing(5000)accomulated dep.(9000)purchases(82000)bad debts(400)unproductive exp.(27400)sundry creditors(9000)sales(120000)cash at bank(25500).adjustments.stock on 31-12-2010(15000).outstanding wages (5000) write-off (600)of further bad debts. create provision for bad & doubtful debts at {5%) on debtors.unproductive expenses includes anitem of prepaid insurance (100).provide depreciation on original cost of fixed assets @ (10%).
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