Question

If current ratio of a particular company is 2.5 times and Working capital is Rs 3 lacs, calculate the amount of current assets.

Answer 1

Answer:

Current ratio = current assets /current liability = 2.5/1

Current assets = current liability x 2.5

Working capital = current assets - current liability

3,00,000 = 2.5 current liability - 1 current liability

3,00,000 = 1.5 current liability

So current liability = 3,00,000 /1.5 = 2,00,000

Current assets = current liability x 2.5

= 2,00,000 x 2.5 = 5,00,000