Question

if quick asset 180000,stock 2,16,000, prepaid expenses 4,000,working capital 300,000,calculate current ratio​

Answer 1

Answer:

current ratio = 4 times

liquid ratio = 1.8 times

Explanation:

current assets = liquid assets + stock + prepaid expenses

= 1,80,000 + 2,16,000 + 4,000

= 4,00,000

working capital = current assets - current liabilities

3,00,000 = 4,00,000 - current liabilities

current liabilities = 1,00,000

current ratio = $\frac{current assets}{current liabilities}$

= $\frac{4,00,000}{1,00,000}$

= 4 times

liquid ratio = $\frac{liquid assets}{current liabilities}$

= $\frac{1,80,000}{1,00,000}$

= 1.8 times

Answer 2

Current ratio = 4:1

Explanation:

Given:

Quick asset = 180,000

Stock = 2,16,000

Prepaid expenses = 4,000

Working capital = 300,000

Computation of current assets:

Current assets = Quick asset + Stock + Prepaid expenses

Current assets = 180,000 + 2,16,000 + 4,000

Current assets = 4,00,000

Working capital = Current assets - Current liabilities

3,00,000 = 4,00,000 - Current liabilities

Current liabilities = 4,00,000 - 3,00,000

Current liabilities = 1,00,000

Current ratio = Current assets / Current liabilities

Current ratio = 4,00,000 / 1,00,000

Current ratio = 4:1

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