Calculate Current Ratio if: Inventory is Rs 6,00,000; Liquid Assets Rs 24,00,000; Quick Ratio 2:1-SOLUTION

Calculate Current Ratio if:

Inventory is Rs 6,00,000; Liquid Assets Rs 24,00,000; Quick Ratio 2:1.

Given,

Quick Ratio = 2:1

Let's Current Liability = x

then, Quick Liability = 2x

or, 24,00,000 = 2x

x = `\frac{24,00,000}{2}`

  = 12,00,000 = Current Liability

Current Asset = Quick Asset + Stock

                       = 24,00,000 + 6,00,000

                       = 30,00,000

Current Ratio = `\frac{30,00,000}{12,00,000}`

                       = 2.5 : 1

Chapter-5 Accounting Ratios-II

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