Question

xltd inventory is 1,12,000. liquid asset 1,28,000 and quick ratio is 1.6 find current ratio ​

Answer 1

Explanation:

Quick ratio = 1.6:1

Let, Current Liabilities = X

Accordingly,

Liquid Asset+inventory/Current Liabilities = 1.6:1

Or, ₹1,28,000+₹1,12,000/X =1.6/1

Or, ₹2,40,000/X = 1.6/1

Or, 1.6X = ₹2,40,000

Or, X = ₹1,50,000

Current Assets = Liquid assets + inventory

= ₹1,28,000+₹1,12,000

= ₹2,40,000

Current Liabilities = ₹1,50,000

Current Ratio = Current Assets/Current Liabilities

= ₹2,40,000/₹1,50,000

= 1.6:1