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
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