Question
Current Ratio 2.5 : 1; Quick Ratio 1 : 1; Current Assets ₹ 5,00,000. Calculate Current Liabilities; Liquid Assets and Inventory.
✓
Answer
Current Ratio $=\frac{\text{Current Assets}}{\text{Current Liabilities}}$
2.5 (Given) $=\frac{₹\ 5,00,000 \text{(Given)}}{\text{Current Liabilities}}$
$\therefore$ Current Assets $\frac{₹\ 5,00,000\text{(Given)} }{2.5}=₹\ 2,00,000$
Acid Test Ratio $=\frac{\text{Liquid Assets}}{\text{Current Liabilities}}$
1 (Given) $=\frac{\text{Liquid Assets}}{₹\ 2,00,000}$
$\therefore$ Liquid Assets = ₹ 2 ,00,000 ×1 = ₹ 2,00,000
Inventory = Current Assets - Liquid Assets
= ₹ 5,00,000- ₹ 2,00,000 = ₹ 3,00,000
2.5 (Given) $=\frac{₹\ 5,00,000 \text{(Given)}}{\text{Current Liabilities}}$
$\therefore$ Current Assets $\frac{₹\ 5,00,000\text{(Given)} }{2.5}=₹\ 2,00,000$
Acid Test Ratio $=\frac{\text{Liquid Assets}}{\text{Current Liabilities}}$
1 (Given) $=\frac{\text{Liquid Assets}}{₹\ 2,00,000}$
$\therefore$ Liquid Assets = ₹ 2 ,00,000 ×1 = ₹ 2,00,000
Inventory = Current Assets - Liquid Assets
= ₹ 5,00,000- ₹ 2,00,000 = ₹ 3,00,000
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