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
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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
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