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 of X’ Ltd., we need to know its current assets and its current liabilities. The current assets are given as Rs. 40,000 and the current liabilities are given as Rs. 1 Lac. Therefore, the current ratio of 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.
The other options are incorrect because they do not take into account the fact that X’ Ltd. has a liquid ratio of 2 : 1.