If cash is Rs. 10,000, closing stock is Rs. 25,000, debtors is Rs. 5000, creditors is Rs. 22,000 and bank overdraft is Rs. 8000, then the current ratio will be

The correct answer is A. 3 : 4.

The current ratio is a liquidity ratio that measures a company’s ability to pay its short-term obligations. It is calculated by dividing current assets by current liabilities.

In this case, the current assets are Rs. 10,000 + Rs. 5000 + Rs. 25,000 = Rs. 40,000. The current liabilities are Rs. 22,000 + Rs. 8000 = Rs. 30,000. Therefore, the current ratio is 40,000 / 30,000 = 4 : 3.

Option B is incorrect because the current ratio is not 4 : 3. Option C is incorrect because the current ratio is not 2 : 1.