Question

Current ratio and quick ratio of a company are 3:1 and 2:1 respectively. Current liability is $30000. what is the value of the inventory?

Answer 1

Answer:

The value of the Inventory is $ 30,000

Explanation:

Solution :

Current Ratio =

$\sf{\dfrac{Current \: Assest}{Current \: Liabilities} = \dfrac{3}{1}}$

Current Liabilities = $ 30,000

$\sf{\dfrac{Current \: Assest}{30000} = \dfrac{3}{1}}$

Current Asset = 30,000 × 3

$\longrightarrow$ 90,000

Current Asset = $ 90,000

Quick Ratio =

$\sf{\dfrac{Quick \: Asset }{Current \: Liabilities} = \dfrac{2}{1}}$

$\sf{\dfrac{Quick \: Asset }{30000} = \dfrac{2}{1}}$

Quick Asset = 30,000 × 2

$\longrightarrow$ 60,000

Quick Asset = 60,000

★ Inventory :

Quick Asset = Current Asset - Inventory

60,000 = 90,000 - Inventory

Inventory = 90,000 - 60,000

Inventory = 30,000

∴ The value of the Inventory is $ 30,000

Answer 2

Answer:

The value of inventory is $30,000

Explanation:

Question:

Current ratio and quick ratio of a company are 3:1 and 2:1 respectively. Current liability is $30000. what is the value of the inventory?

Given:

• Current ratio and quick ratio of a company are 3:1 and 2:1 respectively

• Current liability is $30000

To find:

• The value of inventory

Solution:

Current asset : Current Liability = 3:1

$\rm\dfrac{Current\:asset}{Current\:Liability}$ = $\dfrac{3}{1}$

$\rm\dfrac{Current\:asset}{30000}$ = $\dfrac{3}{1}$

Current asset = $90,000

Formula for quick ratio:

$\rm\dfrac{Quick\:asset}{Current\:Liability}$ = $\dfrac{2}{1}$

$\rm\dfrac{Quick\:asset}{30000}$ = $\dfrac{2}{1}$

Quick asset = $60,000

Inventory formula:

Let the value of inventory be x

Quick asset = Current asset - x

90,000-x = 60,000

x = 30,000

Final answer:

The value of inventory is $30,000