Current Ratio

2022 2021 2020 2019 2018

Current asset 5,672,606,660 4,399,979,513 4,113,488,160 4,000,421,937 3,851,503,675
Current Liabilities 4,236,247,919 4,002,812,920 3,366,725,075 3,209,304,906 2,925,405,865
Current ratio 1.3390639 1.099221872 1.221806969 1.246507282 1.316570709

Here, we can see that the current ratio in 2022 was 1.34:1. It means that the company has the
ability to pay all its short term debt with its current assets. It had 1.32:1 in 2018 and then
continuously showed a downward trend with in the 4 years (2018-2021). Then from 2021 to
2022, it rise and reach at the peak. This might be due to a rise in inventories of MARICO BD Ltd
and a reduction of short term loans & borrowings of the business. However, even after having
the ability to pay back short term debt, the company would have to improve its current ratio by
having more cash & cash equivalent or more inventories. Also, they would have to reduce
payables. They would have to make sure their current ratio is 1.5:1-2.0:1

Acid Test Ratio

2022 2021 2020 2019 2018
Inventories 2,332,427,872 1,980,451,778 1,632,102,325 1,091,494,753 1,717,322,020
Acid test ratio 0.788475758 0.604456862 0.737032511 0.906404118 0.729533526

Here, we can see that the ratio fluctuated with in the five years. In 2019, MARICO BD Ltd had
the highest acid-test ratio of 0.91:1. In 2022, it has 0.79:1, which means the company can pay all
of its short term liabilities using of its liquid assets, which is only 0.79 (less than 1). It isn’t
sufficient to pay all its current liabilities. The standard is to maintain 1:1 acid test ratio. So, it is
recommended for the company to try to sell most of its inventories which is increasing every
year, in order to raise current assets by reducing inventories. However, we hope to see a rise in
liquid ratio as in 2022 it showed a quick increase and the company is up to reducing its short-
term debts.