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A. Pranesh Automotives Ltd. is an OEM automotive parts manufacturer based out of Coimbatore, Tamilnadu that manufactures fuel pumps, instrument clusters, valves, and other products

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A. Pranesh Automotives Ltd. is an OEM automotive parts manufacturer based out of Coimbatore, Tamilnadu that manufactures fuel pumps, instrument clusters, valves, and other products for 2 wheelers, 4 wheelers, and other vehicles. Pranesh recorded sales of Rs. 29 crores, Total Assets of Rs. 17.5 Crores, and Total Debt of Rs. 6.3 Crores in the most recent accounting period. There are no other liabilities for Pranesh. We are further given that the Net Profit Margin for Pranesh is 8%. Given this information compute the following: B. We are also told that Pranesh Automotives Ltd. has a Current Ratio equal to 0.50 . Explain what it means for the firm to have a current ratio equal to 0.50 ? Would the firm be better off if it had a current ratio equal to 1.50 ? How about if the current ratio were to be 5.0 ? Explain in brief which of these current ratios is optimal and why? [3]

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