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Question
Current Ratio 2 : 1, Quick Ratio 1.5 : 1, Current Liabilities ₹ 1,60,000. Calculate Current Assets, Quick Assets and Inventories.
Numerical
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Solution
1. Current Ratio = `"Current Assets"/"Current Liabilities"`
2 = `"Current Assets"/(₹ 1,60,000)`
Current Assets = ₹ 1,60,000 × 2
= ₹ 3,20,000
2. Quick Ratio = `"Quick Assets"/"Current Liabilities"`
1.5 = `"Quick Assets"/(₹ 1,60,000)`
Quick Assets = ₹ 1,60,000 × 1.5
= ₹ 2,40,000
3. Inventories = Current Assets − Liquid Assets
= ₹ 3,20,000 − ₹ 2,40,000
= ₹ 80,000
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