Question

if current ratio is 1.6:1, liquid ratio is 1.2:1 and working capital is 300000. find out the value of current liabilities and stock.​

Answer 1

Answer:

working capital = current Assets - current liabilities

let it be current liabilities X

working capital = CA - CL

3,00,000 = 1.6x - 1x

3,00,000=0.6x

X = 3,00,000÷0.6

X= 5,00,000

current assets = 1.6×5,00,000

current assets = 8,00,000

liquid assets = 1.2×5,00,000

liquid assets = 6,00,000

stock = CA-LA

stock = 8,00,000-6,00,000

stock=2,00,000