Question

if x company limited's current ratio is 5.5:1 and quick ratio is 4:1 ,inventory is Rs 30000 .what are its current liabilities? ​

Answer 1

Explanation:

current ratio is 5.5:1 and

quick ratio is 4:1

inventory is Rs 30000

current liabilities?

Solution :

Current ratio = CA / CL = 5.5:1

Suppose,Current Liabilities be x

Current assets = 5.5x

Quick assets = 4x

Inventory = Current assets-Quick assets

=> Rs 30,000 = 5.5x - 4x

=> Rs 30,000 = 1.5x

=>x = 30,000/1.5

=>x = 20,000

=> current liabilities = 20,000

Therefore,current liabilities = 20,000

Answer 2

Answer:

Current Liabilities is 20,000

Given :

Current Ratio =

$\dfrac{Current \: Assets }{Current \: Liabilities} \: = \: \dfrac{5.5}{1}$

Quick Ratio =

$\dfrac{Quick \: Assets}{Current \: Liabilities} \: = \: \dfrac{4}{1}$

Inventory = Rs 30,000

Explanation:

Let,

Current Liabilities = x

Current Assets = 5.5x

Quick Assets = 4x

Quick Assets = Current Assets - Inventory

4x = 5.5x - 30,000

30,000 = 5.5x - 4x

30,000 = 1.5x

x = 30,000 / 1.5

x = 20,000

Current Liabilities = 20,000

∴ Current Liabilities is 20,000

★ Verification :

Current Liabilities = 20,000

Current Assets = 5.5x

Current Assets = 5.5 × 20,000

Current Assets = 1,10,000

Quick Assets = 4x

Quick Assets = 4 × 20,000

Quick Assets = 80,000

★ Quick Assets = Current Assets - Inventory

80,000 = 1,10,000 - 30,000