Question

Current ratio =2:5,current liabilities =30000,find net working capital

Answer 1

Current ratio = 2 : 5 , Current liabilities = 30,000. Find net working capital.

Answer: (-) 18,000

$\tt{Current \: \: Ratio = \frac{Current \: \: Assets}{Current \: \: Liabilities}}$

» 2 : 5 = Current Assets / 30,000

» 2/5 = Current Assets / 30,000

» 2/5 × 30,000 = Current Assets

» Current assets = 12,000

Now, we know that:

Working Capital = Current Assets - Current Liabilities

= 12,000 - 30,000

= (-) 18,000

Thus, the net working capital is (-) 18,000.