25 :- Xolo Ltd.’s Liquidity Ratio is 2.5:1. Inventory is Rs 6,00,000. Current Ratio is 4:1. Find out the Current Liabilities.
Solution :-
Current Ratio = Current Assets/Current Liabilities
4 = C.A/C.L
4 C.L = C.A — Eq 1
Quick Ratio = Liquid Assets/Current Liabilities
2.5 = C.A – 6,00,000/C.L
2.5 C.L = C.A – 6,00,000
From Eq 1
2.5 C.L = 4 C.L – 6,00,000
1.5 C.L = 6,00,000
C.L = 6,00,000/1.5
Current Liabilities = Rs 4,00,000