Current ratio 3:1 , working capital 400000 , inventory 250000 . Calculate current asset , current liability , quick ratio
Answers
Current assets = 6,00,000
Current liabilities = 2,00,000
Quick ratio = 1.75 : 1
Explanation:
Given:
Current ratio = 3:1
Working capital = 4,00,000
inventory = 2,50,000
Computation:
Working capital = current assets - current liabilities
4,00,000 = Current assets - current liabilities
Current liabilities = Current assets - 4,00,000
Current ratio = current assets / current liabilities
3 = current assets / Current assets - 4,00,000
3 Current assets -12,00,000 = Current assets
2 Current assets = 12,00,000
Current assets = 6,00,000
Current liabilities = Current assets - 4,00,000
Current liabilities = 6,00,000 - 4,00,000
Current liabilities = 2,00,000
Quick ratio = (current assets - inventory) / current liabilities
= (6,00,000 - 2,50,000) / 2,00,000
= 3,50,000 / 2,00,000
Quick ratio = 1.75 : 1
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