Current Liabilities of a company are Rs. 75,000. If current ratio is

1.	Current Liabilities of a company are Rs. 75,000. If current ratio is 4 : 1 and Liquid Ratio is 1: 1, calculate value of Current Assets, Liquid Assets and Inventory.
Answer» Current Ratio = \(\frac {\textit{Current assets}}{\textit{Current Liabilities}} \) or, 4 = \(\frac {\textit{Current assets}}{\textit{75,000}} \) or, 4 × 75,000 = Current Assets or, Current Assets = 3,00,000 Liquid Ratio = \(\frac {\textit{Liquid assets}}{\textit{Current Liabilites}} \) Or, 1 = \(\frac {\textit{Liquid assets}}{\textit{75,000}} \) Current liabilities Liquid Assets = 75,000 Stock = Current Assets -Liquid Assets = 3,00,000 – 75,000 = 2,25,000

Current Liabilities of a company are Rs. 75,000. If current ratio is 4 : 1 and Liquid Ratio is 1: 1, calculate value of Current Assets, Liquid Assets and Inventory.

Answer»

Current Ratio = \(\frac {\textit{Current assets}}{\textit{Current Liabilities}} \)

or, 4 = \(\frac {\textit{Current assets}}{\textit{75,000}} \)

or, 4 × 75,000 = Current Assets

or, Current Assets = 3,00,000

Liquid Ratio = \(\frac {\textit{Liquid assets}}{\textit{Current Liabilites}} \)

Or, 1 = \(\frac {\textit{Liquid assets}}{\textit{75,000}} \)

Current liabilities

Liquid Assets = 75,000

Stock = Current Assets -Liquid Assets

= 3,00,000 – 75,000 = 2,25,000