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Question
Working Capital is ₹ 9,00,000; Trade payables ₹ 90,000; and Other Current Liabilities are ₹ 2,10,000. Circulate Current Ratio.
Sum
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Solution
Working Capital = Rs 9,00,000
Current Liabilities = Trade Payables + Other Current Liabilities
= Rs 90,000 + Rs 2,10,000 = Rs 3,00,000
Working Capital = Current Assets – Current Liabilities
Rs 9,00,000 = Current Assets – Rs 3,00,000
Current Assets = Rs 9,00,000 + Rs 3,00,000 = Rs 12,00,000
`"Current Ratio" = "Current Assets"/ "Current liability" = 1200000/300000 = 4 : 1`
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