5 :- Current Ratio is 2.5, Working Capital is R 1,50,000. Calculate the amount of Current Assets and Current Liabilities.
Solution :-
Current Ratio = 2.5
Current Ratio = Current Assets/Current Liabilities
2.5 = C.A/C.L
2.5 C.L = C.A — Eq 1
Working Capital = Current Assets – Current Liabilities
1,50,000 = C.A – C.L
From equation 1
1,50,000 = 2.5 C.L – C.L
1,50,000 = 1.5 C.L
1,00,000 = C.L
Current Liabilities = Rs 1,00,000
Putting value of Current Liabilities in eq 1
2.5 C.L = C.A (Current Assets)
2.5 X 1,00,000 = Current Assets
2,50,000 = Current Assets