Question

Current ratio = 2:1, Quick ratio 0.5:1, current liabilities 2 200000. Find out (a) current assets (b) Quick assets​

Answer 1

Answer:

a) Current Liabilities CL= 22,00,000

CA = 2CL 44,00,000

Therefore Current Assets = 44,00,000

b) Quick Assets = 0.5CL = 11,00,000

Hope it helps

Answer 2

Given:

• Current ratio = 2:1
• Quick ratio = 0.5:1
• Current liabilities = Rs 22,00,000

To find:

• The current assets
• The quick assets

Answer:

(a) Current assets

Current ratio = Current assets ÷ Current liabilities

We have

• current ratio = 2:1, or 2
• current liabilities = Rs 22,00,000

Substituting them in the formula,

2 = CA ÷ Rs 22,00,000

CA = Rs 22,00,000 × 2

CA = Rs 44,00,000

Therefore, the current assets are Rs 44,00,000.

(b) Quick assets

Quick ratio = Quick assets ÷ Current liabilities

We have

• quick ratio = 0.5:1, or 0.5
• current liabilities = Rs 22,00,000

Substituting them in the formula,

0.5 = QA ÷ Rs 22,00,000

QA = Rs 22,00,000 × 0.5

QA = Rs 11,00,000

Therefore, the quick assets are Rs 11,00,000.