#### Question

Current Ratio is 3.5:1. Working Capital is Rs 90,000. Calculate the amount of Current Assets and Current Liabilities.

#### Solution

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

`"or".3.5 = "Current assets"/"Current Liablities"`

or, Current Assets = 3.5 Current Liabilities (**1**)

Working Capital = Current Assets − Current Liabilities

Working Capital = 90,000

or, Current Assets − Current Liabilities = 90,000

or, 3.5 Current Liabilities − Current Liabilities = 90,000 (from **1**)

or, 2.5 Current Liabilities = 90,000

`"or.Current Liablities" = "90,000"/"2.5" = 36,000`

`"or.Current Assets" = 3.5 "Current Liablities"`

= `"3.5 "xx" 36,000"`

= `1,26,000`

Is there an error in this question or solution?

Solution Current Ratio is 3.5:1. Working Capital is Rs 90,000. Calculate the Amount of Current Assets and Current Liabilities. Concept: Types of Ratios.