#### Question

Current liabilities of a company are Rs 75,000. If current ratio is 4:1 and liquid ratio is 1:1, calculate value of current assets, liquid assets and inventory.

#### Solution

`"Current Ratio" = "Current Assets"/"Current Liablities"`

`or,4 = "Current Assets"/"75,000"`

or, 4 × 75,000 = Current Assets

or, Current Assets = 3,00,000

`"Liquid Ratio" = "Liquid Aseets"/"Current Liablities"`

or, `1 = "Liquid Assets"/"75,000"`

Liquid Assets = 75,000

Inventory = Current Assets − Liquid Assets

= 3,00,000 − 75,000

= 2,25,000

Is there an error in this question or solution?

Solution Current Liabilities of a Company Are Rs 75,000. If Current Ratio is 4:1 and Liquid Ratio is 1:1, Calculate Value of Current Assets, Liquid Assets and Inventory. Concept: Types of Ratios.