Question

Calculate current ratio from the following :
Working capital ?192000
Long term debt ?80000
Total debt ?200000

Answer 1

Dear student,
Current Liabilities is equal to Total debt-Long term debt
= 200000-80000
=Rs.120000

Working capital = current assets- current liabilities
Therefore current assets= Working capital + current liabilities
Current assets=192000+120000
=Rs.312000

Therefore the current ratio is $\frac{Currentassets}{Currentliabilities}$
$$\begin{gathered} =\frac{312000}{120000} \\ =2.6:1 \end{gathered}$$

Regards