given that:
current ratio = 2.5
quick ratio 1.5
working capital 60000
the value of current liability will be
a) rupees 15000
b) rupees 40000
c)rupees 60000
d)rupees 100000
Answers
Answer:
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Explanation:
ANSWER
Given,
Current ratio = 2.5 : 1
Quick Ratio = 1.5 : 1
Net working capital = 60,000
Net working capital = Current assets - Current liabilities
Current Assets = Net working capital + Current liabilities
= 60,000 + Current liabilities (1)
Current ratio = Current assets
-------------------------
Current liabilities
Current Assets = Current liabilities x 2.5 (2)
Merging equation (1) and (2)
60,000 + Current liabilities = 2.5Current liabilities
60,000 = 2.5 current liabilities - Current liabilities
60,000 = 1.5 Current liabilities
Current liabilities = 60,000
--------------
1.5
= 40,000
Therefore, current liabilities = 40,000