Question

From the following information calculate shareholders fund :
Current ratio 2.5 Liquid ratio 1.5 Proprietory ratio 0.75
Working capital 60000 Reserve and surplus 40000 Loan funds 10000

Answer 1

Current Ratio = Current Assets (C.A)/ Current Liabilities (C.L) = 2.5

So, CA= 2.5 CL

Now, Working Capital = Current Assets(C.A) minus Current Liabilities (C.L) = Rs.60000

So, C.A - C.L = 60000

2.5 C.L-CL = 60000

C.L = Rs.40000

Now, C.A = 2.5 x 40000 = Rs.100000

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