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Question
Read the following hypothetical extract of ABC Ltd. and answer the question that follows:
The following information is given:
Trade Receivables Turnover Ratio | 4 times |
Current Liabilities | ₹ 5,000 |
Average Debtors | ₹ 1,80,000 |
Working Capital Turnover Ratio | 8 times |
Cash Revenue from Operations | 25% of Revenue from Operations |
Gross Profit Ratio | `33 1/3%` |
What will be the value of current assets?
Options
₹ 1,25,000
₹ 5,000
₹ 1,20,000
₹ 55,000
MCQ
Solution
₹ 1,25,000
Explanation:
Working Capital = Current Assets − Current Liabilities
Current Assets = Working Capital + Current Liabilities
= ₹ 1,20,000 + ₹ 5,000
= ₹ 1,25,000
shaalaa.com
Activity Ratio - Current Assets Turnover
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