Question

X Ltd. has its Current ratio of 3:1 and Liquid Ratio as 1.5:1, If the value of inventory is Rs. 30,000. Calculate Current Assets and Liquid assets.​

Answer 1

Answer:

CURRENT ASSETS (C.A.) = 60000

LIQUID ASSETS = 30000

Explanation:

liquid ratio = (current asset - inventory)/ current liability

1.50 = (C.A. - 30000) / C.L.

1.50 * C.L. = C.A. - 30000            .............( 1 )

current ratio = current assets / current liability

3 = C.A. / C.L.

3 * C.L. = C.A.                               .................( 2 )

NOW we put (2) in (1)

1.50 * C.L. =  3 *C.L. -30000

(3-1.5) *C.L. = 30000

C.L. = 30000/1.50

C.L. = 20000

SO,

CURRENT ASSETS (C.A.) = 3 * C.L.

                                          = 3*20000

                                          = 60000

AND

LIQUID ASSETS = C.A. - INVENTORY

                           = 60000 - 30000

                           = 30000          

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