Question

The current assets of a company are 15,00,000. Its current ratio is 3 and liquid
ratio is 1.25. calculate the amount of current liabilities, liquid assets and
inventory.
6 MARKS.​

Answer 1

Verifed answer ✔️

Given :

Current assets = 15,00,000

Let the current liability be x

current assets /current liabiltites = 3:1

$\frac{1500000}{x} = 3 \\ x = \frac{15000000}{3}$

current liabilites = 5,00,000

$liquid \: ratio \: = \:current \: assests -\frac{inventory}{current \: libilites}$

Let the inventories be Y

1.25 : 1 = 15,00,000 - y / 5,00,000

y = 15,00,000 - 6,25,000

y = 8,75,000

Inventory = 8,75,000

Liquid assets = current assets - inventories = 6,25,000

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