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Question
Calculate Current Ratio from the following:
Working Capital ₹ 4,80,000; Current Assets ₹ 6,00,000; Inventory ₹ 4,00,000 and Trade Receivables ₹ 1,50,000.
Numerical
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Solution
Current Ratio = `"Current Assets"/"Current Liabilities"`
Current Liabilities = Current Assets − Working Capital
= ₹ 6,00,000 − ₹ 4,80,000
= ₹ 1,20,000
= `"₹ 6,00,000"/"₹ 1,20,000"`
= 5 : 1
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