Question

The working capital of IAN Ltd. is 2,00,000 and its current assets are 6,00,000. What is its current ratio?
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YARACHU ERUKIGALA ​

Answer 1

Current Ratio = Current Assets (C.A)/ Current Liabilities (C.L) = 2/1

So, CA= 2 CL

Now, Working Capital = Current Assets(C.A) minus Current Liabilities (C.L) = Rs.60000

So, C.A - C.L = 60000

2 C.L-CL = 60000

C.L = Rs.60000

Now, C.A = 2 x 60000 = Rs.120000