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Question
Quick Assets ₹ 90,000; Inventory ₹ 1,08,000; Prepaid Expenses ₹ 2,000; Working Capital ₹ 1,50,000. Calculate Current Ratio.
Numerical
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Solution
Current Assets = Quick Assets + Inventory + Prepaid Expenses
= ₹ 90,000 + ₹ 1,08,000 + ₹ 2,000
= ₹ 2,00,000
Current Liabilities = Current Assets − Working Capital
= ₹ 2,00,000 − ₹ 1,50,000
= ₹ 50,000
Current Ratio = `"Current Assets"/"Current Liabilities"`
= `(₹ 2,00,000)/(₹ 50,000)`
= 4 : 1
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