Current Assets of a company are Rs 5,00,000

26 :- Current Assets of a company are Rs 5,00,000. Its Current Ratio is 2.5 : 1 and Quick Ratio is 1:1. Calculate values of Current Liabilites, Liquid Assets and Inventory.

Solution :-

Current Ratio = Current Assets/Current Liabilities
              2.5  = 5,00,000/Current Liabilities
Current Liabilities = Rs 2,00,000

Quick Ratio = Liquid Assets/Current Liabilities
               1 = Liquid Assets/2,00,000
Liquid Assets = Rs 2,00,000

Quick Assets = Current Assets – Inventories
2,00,000 = 5,00,000 – Inventories
Inventories = 5,00,000 – 2,00,000
Inventories = Rs 3,00,000

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