Question

Liuid ratio 1.75:1 stock 30000 and current liabilities 40000 what is the current assets

Answer 1

we know that

Liquid Ratio

= (Current Assets - stock )/ Current Liabilities

Given Current Liabilities= 40000

stock= 30000..

Let current assets be R

substituting it in the above formula..

(R - 30000)/40000 = 1.75 :1

(R - 30000)/40000 = 1.75


(R - 30000)= 1.75 (40000)


(R - 30000)= 70000

R = 70000 + 30000 = 100000

so current assets= 100000

Answer 2

Given ,

Liquid ratio = 1.75 : 1

Stock = 30000

current liablities =40000

---------------------------------------------------------------------

Formula

Liquid ratio =  quick asset  ÷ current liabilities

                                             or

                  = (current assets - stock) ÷ liablities

---------------------------------------------------------------------------------------------

solution :

Liquid ratio = (current assets - stock ) ÷ liablities

1.75 ÷ 1           = (current assets - 30000) ÷ 40000

let cross mutliply

current assets - 30000 = 1.75(40000)

current asset- 30000    =70000

current asset                  =70000+30000

current asset                   = 1,00,000

Therefore current asset = 1,00,000