Ans. Working Capital 5,40,000; Current Ratio 2.8 : 1: Inventory
330.000. Calculate Current Assets, Current Liabilities and Quick Ratio.
Answers
Answer:
Current Asset = 840000
Current Liability = 300000
Quick Ratio = 1.7
Explanation:
Working Capital - WC
Current Asset - CA
Current Liability - CL
Current Ratio - CR
Quick Ratio - QR
Liquid Asset - LA
Inventory - I
WC = CA - CL = 540000 ----Equation 1
CR = CA÷CL = 2.8 implies,CA = 2.8×CL-Equation 2
Substituting Eqn 2 in Eqn 1, we get,
2.8CL-CL = 540000
1.8 CL = 540000
CL = 300000
Substituting CL = 300000 in Eqn 2, we get,
CA = 2.8×300000 = 840000
LA = CA - I = 840000-330000 = 510000
QR = LA÷CL = 510000÷300000 = 1.7 : 1
Current liabilities = 3,00,000
Current assets = 8,40,000
Quick ratio = 1.7
Explanation:
Given:
Current ratio = 2.8 : 1
Quick ratio = ?
Working capital = 5,40,000
Inventory = 330,000
Current assets = ?
Current liabilities = ?
Computation:
Working capital = Current assets - Current Liabilities
5,40,000 = Current assets - Current Liabilities
Current assets = 5,40,000 + Current liabilities
Current ratio = Current assets / Current liabilities
2.8 = (5,40,000 + Current liabilities) / Current liabilities
2.8 Current liabilities = 5,40,000 + Current liabilities
1.8 Current liabilities = 5,40,000
Current liabilities = 3,00,000
Current assets = 5,40,000 + Current liabilities
Current assets = 5,40,000 + 3,00,000
Current assets = 8,40,000
Quick ratio = (Current assets - Stock) / Current liabilities
Quick ratio = (8,40,000 - 3,30,000) / 3,00,000
Quick ratio = 5,10,000 / 3,00,000
Quick ratio = 1.7
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