Question

X Ltd. has Current Ratio of 4.5 : 1 and a Quick Ratio of 3 : 1. If its inventory is  ₹  36,000, find out its total Current Assets and total Current Liabilities.

Answer 1

`"Current Ratio" = "Current Assets"/ "Current liability" = 4.5/1`

`"Quick Ratio" = "Quick Assets"/"Current Liabilities" = 3/1`

Inventory = 36,000

Let Current Liabilities be = x

Current Assets = 4.5x

Quick Assets = 3x

Stock = Current Assets − Quick Assets

36,000 = 4.5x − 3x

x = 24,000

Current Assets = 4.5x = 4.5 × 24,000 = 1,08,000

Liquid Assets= 3x = 3 × 24,000 = 72,000