23 :- Current Ratio 4; Liquid Ratio 2.5; Inventory Rs 6,00,000. Calculate Current Liabilities, Current Assets and Liquid Assets.
Solution :-
Current Ratio = Current Assets/Current Liabilities
4 = C.A/C.L
4 C.L = C.A —- Eq 1
Quick Ratio = Quick Assets/Current Liabilities
2.5 = Current Assets – Inventories/Current Liabilities
2.5 = Current Assets – 6,00,000/Current Liabilities
2.5 C.L = C.A – 6,00,000 — Eq 2
From Eq 1 and Eq 2
2.5 C.L = 4 C.L – 6,00,000
1.5 C.L = 6,00,000
C.L = 6,00,000/1.5
C.L = Rs 4,00,000
Putting C.L in Eq 1
4 C.L = C.A
4 x 4,00,000 = C.A
Current Assets = Rs 16,00,000
Quick Assets = Current Assets – Inventories
= 16,00,000 – 6,00,000
= Rs 10,00,000