Question

Current ratio is 3:1 net working capital rs. 200000 inventory rs. 220000 calculate current assets current liabilities liquidity ratio

Answer 1

Answer:

current ratio is 3:1

current assets 3x

current liabilities X

working capital = current assets minus current liabilities

200000= 3x-x

2x= 200000

X= 100000

c.l. - 100000

c.a - 300000

liquid ratio= current assets-inventory/current liabilities

300000-220000/100000

80000/100000

4/5

Answer 2

Given:

Current ratio = 3:1

Capital Rs = 200000

Inventory Rs = 220000

To Find:

Current assets to the current liabilities liquidity ratio

Explanation:

Current ratio is given as 3:1

Therefore the current assets =  3x and current liabilities = x

Now according to the given question the working capital is equal to the current assets minus current liabilities

Hence 200000 = (3x-x)

2x = 200000

x = 100000

C.I = 100000

C.A= 300000

Liquidity ratio is equal to the (current assets-inventory/current liabilities)

(300000 - 220000)/100000

(80000/100000)

4/5

Hence the ratio = 4:5