The correct answer is A. 1.4 times.
The liquid ratio is a measure of a company’s ability to meet its short-term obligations. It is calculated by dividing the company’s current assets by its current liabilities. A liquid ratio of 2 : 1 means that the company has 2 rupees of current assets for every 1 rupee of current liabilities.
The current ratio is a measure of a company’s ability to meet its short-term obligations. It is calculated by dividing the company’s current assets by its current liabilities. A current ratio of 1.4 times means that the company has 1.4 rupees of current assets for every 1 rupee of current liabilities.
To calculate the current ratio for X Ltd, we need to know the value of its current assets and its current liabilities. We are given that the value of its stock is Rs. 40,000 and its current liabilities are of Rs. 1,00,000. Therefore, the current ratio for X Ltd is:
Current ratio = Current assets / Current liabilities = 40,000 / 1,00,000 = 1.4 times
Therefore, the correct answer is A. 1.4 times.