Question

Working capital is Rs 7,20,000; Trade payable is Rs 40,000; Other current liabilities Rs 2,00,000; Current ratio is​

Answer 1

Current ratio. = current assets : current liability
Total current liability 40000+200000 = 240000
Working capital = current asset - current liab
720000 = c a - 240000
C a = 960000
960000 : 240000
96:24
4:1

Answer 2

Given:

• Working capital = Rs 7,20,000
• Trade payables = Rs 40,000
• Other current liabilities = Rs 2,00,000

To find: The current ratio.

Answer:

Current ratio = Current assets ÷ Current liabilities

Current liabilities = Trade payables + Other current liabilities

Current liabilities = Rs 40,000 + Rs 2,00,000

Current liabilities = Rs 2,40,000

We don't have the current assets and will need to find it using the given data.

Working capital = Current assets - Current liabilities

Rs 7,20,000 = CA - Rs 2,40,000

CA = Rs 7,20,000 + Rs 2,40,000

CA = Rs 9,60,000

Current ratio = Rs 9,60,000 ÷ Rs 2,40,000

Current ratio = 4:1

Therefore, the current ratio is 4:1.