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The following information of a company is given:Current Ratio = 2.8, Acid Test Ratio = 1.5 , Working Capital = Rs.1,62,000Calculate: (i) Current Ratio (ii) Current Liabilities (iii) Liquid Assets |
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Answer» Answer: Current Ratio = CA/CL, 2.8 = CA/CL, CA = 2.8 CL ---------------------(1) And, QUICK Ratio = 1.5 Quick Ratio = QA/CL 1.5 = QA/CL QA = 1.5 CL ----------------------(2) ------------------------------------------------ Working Capital RATION Formula: Working Capital = Current ASSET - Current Liabilities 162000 = 2.8 CL - CL (By Equation 1, CA = 2.8 CL) 162000 = 1.8 CL CL = 162000/1.8 Current Liabilities = 90000 --------------------------------------------------- Current Asset = 2.8 CL Current Asset = 2.8 * 9000 Current Asset = 252000 --------------------------------------------------- Quick Asset = 1.5 CL ----------------------------- (by Equation 2, QA = 1.5 CL) Quick Asset = 1.5 * 9000 Quick Asset = 60000 Explanation: |
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