Illustration 53 From the following summarised financial statement of Arthur Ltd as on 31st December, 2016 and 31st December, 2017, calculate the following ratios for the two years : (a) Capital Gearing Ratio; (b) Acid Test Ratio; and (c) Current Ratio. Balance Sheet of Arthur Ltd. as at 31st December, 2016 and 2017 Note 31.12.2016 31.12.2017 Particulars No. (1) (2) (3) I. EQUITY AND LIABILITIES (1) Shareholders' Funds : (a) Share Capital - Equity Share of 10 each fully paid 5,00,000 6,00,000 (b) Reserves and Surplus - Securities Premium 20.000 Revenue Reserve 80,000 1,20,000 Profit and Loss Account 1,20,000 1,60,000 (2) Share Application Money Pending Allotment: (3) Non-current Liabilities: (a) Long-term Borrowings - 10% Debentures 2,00,000 1,00,000 (4) Current Liabilities: (a) Trade Payables --- Sundry Creditors 3,50,000 3,70,000 TOTAL 12,50,000 13,70,000 II. ASSETS (1) Non-current Assets : (a) Fixed Assets Tangible Assets : Freehold Premises 3,00,000 3,00,000 Machinery 3,00,000 3,60,000 Furniture 25,000 34,000 e40 (2) Current Assets : (a) Inventories (b) Trade Receivables - Debtors (c) Cash and Cash Equivalents - Cash in Hand TOTAL 3,20,000 3,00,000 5,000 12,50,000 3,90,000 2,50,000 36,000 13,70,000