Question

Find current assets ,liquid assets and stock given current liability 30000 current ratio 2.25 times liquid ratio 1.25 times
Please answer

Answer 1

Explanation:

Net working capital = Current assets - Current liabilities

Rs.30000 = Current assets - Current liabilities

Therefore, Current assets = Current liabilities + Rs.30000

Current ratio = Current assets/ Current liabilities

2.5 = [Current liabilities + Rs.30000] / Current liabilities

 2.5 Current liabilities  = Current liabilities + Rs.30000

Current liabilities = Rs.30000/1.5

Therefore, Current liabilities = Rs.20000

Now,

Current assets = Current liabilities + Rs.30000

                          = Rs.20000+Rs.30000

                          =Rs.50000

Now, Quick Ratio = Quick Assets/ Current liabilities

                     1.5   = Quick Assets/ 20000

Therefore,

                  Quick Assets = Rs.30000

Quick Ratio = Quick Assets/ Current liabilities

Quick Ratio = [Current Assets - Stock ]/ Current liabilities

            1.5 = [50000 - Stock] / 20000

Stock = 50000−30000

          = Rs.20000