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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. - Accountancy

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ConceptTypes of Ratios

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.
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