Question

If the current ratio is 2.50:1 and the net working capital is rs.75,000 then the current liabilities will be------

Answer 1

Answer:

Step-by-step explanation:

Let, the current assets be x.

Current liabilities = Current assets -Working capital

Current ratio

= current assets/current liabilities

=> 2.5/1 = x/(x-75000)

=> 2.5(x-750000) = x

=> 2.5x - 187500 = x

=> 2.5x-x = 187500

=> 1.5x = 187500

=> x = 187500/1.5

=> x = 125000

Therefore,

(x-75000) = (125000-75000)

=> 50000

Current liabilities are Rs. 50000.