Question

If the current ratio is 2:1 and working capital is rs.60000, what is the value oof the current assets

Answer 1

Current ratio is given as 2:1 and working capital is given as 60000.

Then value of current assets = ?

Current ratio can be calculated by the formula, Current ratio = current assets/ current liabilities and working capital = current assets - current liabilities.

Therefore, Current liabilities= current assets – 60000

Therefore, 2/1 = current assets / current assets – 60000

2 (current assets -60000) = current assets

2 current assets -120000= current assets

Current assets = 12000

Answer 2

Answer:

the Value of Current Assets is Rs. 1,20,000

Explanation:

Current ratio= 2:1

Current ratio = $\frac{Current \: Assets}{Current \: Liabilities} = \frac{2}{1}$

Let,

Current Liabilities = x

Current Assets = 2x

Working capital = Rs. 60,000

Working capital = Current Assets - Current Liabilities

60,000 = 2x - x

60,000 = x

x = 60,000

Current Liabilities = Rs. 60,000

Current Assets = 2x

= 2 × 60,000

= 1,20,000

Current Assets = Rs. 1,20,000

Hence, the Value of Current Assets is Rs. 1,20,000