Question

Current liabilities of a company are Rs 75,000. If current ratio is 4:1 and liquid ratio is 1:1, calculate value of current assets, liquid assets and inventory.

Answer 1

or, 4 × 75,000 = Current Assets

or, Current Assets = 3,00,000

or,

Liquid Assets = 75,000

Inventory = Current Assets − Liquid Assets
= 3,00,000 − 75,000
= 2,25,000