Question

Current Ratio $2.5$, Liquid Ratio $1.5$ and Working Capital $Rs.60,000$. What is the amount of Current Assets?

• A. $Rs.60,000$
• B. $Rs.80,000$
• C. $Rs.1,00,000$
• D. $Rs.1,20,000$

Answer 1

The correct option is C $Rs.1,00,000$

Current Ratio = Current Assets (C.A)/ Current Liabilities (C.L) = $2.5$

So, CA= $2.5$ CL

Now, Working Capital = Current Assets(C.A) minus Current Liabilities (C.L) = $Rs.60000$

So, C.A - C.L = $60000$

$2.5$ C.L-CL = $60000$

C.L = $Rs.40000$

Now, C.A = $2.5$ x $40000$ = $Rs.100000$