Question

Q9-If current ratio of a firm is 2.5:1
1 point
and its current assets
are3,00,000. Its working capital
will be
2,00,000
1,80,000
2,20,000
2,00,000​

Answer 1

Answer:

Working Capital will be 1,80,000

Explanation:

$\sf{Current\:Ratio = {\dfrac{Current \: Assets }{Current \: Liabilities}}}$

$\sf{\longrightarrow{\dfrac{Current \: Assets }{Current \: Liabilities} = \: \ \dfrac{2.5}{1}}}$

$\sf{\longrightarrow{\dfrac{300000 }{Current \: Liabilities} = \: \ \dfrac{2.5}{1}}}$

Current Assets = 3,00,000

Let,

Current Liabilities = x

$\sf{\longrightarrow{\dfrac{300000 }{x} = \: \ \dfrac{2.5}{1}}}$

$\longrightarrow$ 2.5x = 3,00,000

$\longrightarrow$ x = 3,00,000/2.5

$\longrightarrow$ x = 1,20,000

Current Liabilities = 1,20,000

Working Capital = Current Assets - Current Liabilities

$\longrightarrow$ 3,00,000 - 1,20,000

$\longrightarrow$ 1,80,000

Working Capital = 1,80,000

Therefore, working capital will be 1,80,000.

Answer 2

Explanation:

Current Ratio = Current Assets /Current Liabilities

current ratio of a firm is 2.5:1

current assets are 3,00,000.

==> 3,00,000./ Current Liabilities = 2.5/1

==> Current Liabilities = 3,00,000 /2.5

==> Current Liabilities = Rs.1,20,000

Working Capital = CA - CL

Working Capital = 3,00,000 - 1,20,000

Working Capital =1,80,000

Hence,

option - 1,80,000 (working capital will be Rs.1,80,000)