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Question
Star Ltd. submits you the following information:
| Current Ratio | 2.4 : 1 |
| Quick Ratio | 1.6 : 1 |
| Working Capital | ₹ 2,80,000 |
Inventory of the company will be:
Options
₹ 1,60,000
₹ 4,80,000
₹ 3,20,000
₹ 2,00,000
MCQ
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Solution
₹ 1,60,000
Explanation:
Quick Ratio = `"Liquid Assets"/"Current Liabilities"`
1.6 = `"Liquid Assets"/(2,00,000)`
∴ Liquid Assets = 2,00,000 × 1.6
= ₹ 3,20,000
Inventory = Current Assets − Liquid Assets
= 4,80,000 − 3,20,000
= ₹ 1,60,000
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