Question

Current Liabilities ₹ 1,60,000, Liquid Ratio is 1.5 : 1 and Current Ratio 2.5 : 1. Calculate Inventory (Stock), Quick Assets and Current Assets.

Answer 1

1. Calculation of Current Assets:

\[\text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}}\]

$$2.5 = \frac{\text{Current Assets}}{₹1,60,000}$$

$$\text{Current Assets} = ₹ 1,60,000 \times 2.5 = {₹4,00,000}$$

2. Calculation of Quick Assets:

$$\text{Liquid Ratio} = \frac{\text{Quick Assets}}{\text{Current Liabilities}}$$

$$1.5 = \frac{\text{Quick Assets}}{₹1,60,000}$$

$$\text{Quick Assets} = ₹1,60,000 \times 1.5 ={₹2,40,000}$$

3. Calculation of Inventory (Stock):

$$\text{Inventory} = \text{Current Assets} - \text{Quick Assets}$$

$$\text{Inventory} = ₹4,00,000 - ₹2,40,000 = {₹1,60,000}$$