Question

What will be the Current ratio of a company whose Net Working Capital is Zero?​

Answer 1

Answer:

1

Explanation:

Working Capital = Current Assets - Current Liabilities

when working capital is zero;

That means Current assets = Current liabilities

Current ratio =  Current assets / Current Liabilities

will then be equal to 1

Answer 2

The company's current ratio  will be 1.

Explanation:

Given:

Net working capital of  the company is zero.

To Find:

The company's current ratio .

Solution:

As given-net working capital of the company is zero.

Net working capital of the company (W.C)= Current Assets of   the company(A.C) - Current Liabilities of the company (L.C)

0 = current Assets of   the company(A.C) - current Liabilities of the company (L.C)

Current Assets of   the company(A.C) =Current Liabilities of the company (L.C)

The company's current ratio $=\frac{Current\ Assets\ of\ a\ company\ (A)}{Current\ Liabilities\ of\ a\ company\ (L)}$

The company's current ratio $=\frac{Current\ Assets\ of\ a\ company\ (A)}{Current\ Assets\ of\ a\ company\ (A)}$

The company's current ratio=1

Thus,the company's current ratio  will be 1.

PROJECT CODE#SPJ3