working capital of a company is ₹30000. It's current ratio is 2.5:1 calculate the value of
current asset and current liabilities
Answers
current ratio =2.5:1
working capital=30,000
current asset,current liab. =?
current ratio=current asset /current liab.
let liab be .....x.....
therefore current assets = 2.5...x....
let us use this ratio of current ratio in working capital formula
wc.= current asset - current liability
keeping the values
30,000= 2.5...x.. - x
30,000= 1.5...x
30,000 / 1.5 = x ( current liability)
therefore c/l. = 20,000
and current assets = 2.5 × ...x.....
so 2.5 × 20,000= 50,000
☺️
Current asset= ₹50000, Current liabilities= ₹20000
working capital = ₹30000
current ratio = 2.5:1
current ratio formula = current asset/current liabilities.
generally 2:1 is considers as the ideal ratio for current ratio.
2.5/1 = current assets/current liabilities.
current assets= 2.5CL
working capital = CA-CL
30000 = 2.5CL-CL
30000 = 1.5CL
CL = 30000/1.5 = 20000
Current liabilities = ₹20000
Current assets = 2.5*20000
= ₹50000