Question

Warfied company having net working capital of Rs. 3 lakh
has the current ratio of 1:8 and liquid ratio of 1:6. Its value of

Answer 1

Answer:

Current Ratio = Current assets/Current liabilities

Liquid ratio= Current assets- Inventory/ Current Liabilities

Net working capital = Current assets- current liabilities

Let Current liabilities be x

Current assets = 300000 + x

Current Ratio = Current assets/Current liabilities

1.8= 300,000 +x/ x

0.8x= 300,000

x = 375000

Therefore, Current liabilities = 375000

Current assets = 675000