Question

Current ratio of the farm is force 4:3and working capital 60000 .calculate current asset and current liabilities

Answer 1

Current Ratio is a ratio of current assets and current liability so if the current ratio is 4:3 that means if current assets are 4 then current liabilities are 3.

In this scenario the difference of both is 60000 so we can solve it as below:-

Working Capital = Current Assets - Current Liabilities

Current assets/ Current Liabilities = 4 /3

So, Current assets = 4/3(Current Liabilities)

If we put this value in working capital formula we get:-  

4/3(Current Liabilities) - Current Liabilities = 60000

1/3(Current Liabilities) = 60000

Current Liabilities = 60000*3 = 180000

So Current assets would be = 180000+60000 = 240000