Current Ratio Is 3.5:1. Working Capital Is Rs 90,000. Calculate The Amount Of Current Assets And Current Liabilities.-ACCOUNTING RATIOS

Current Ratio is 3.5:1. Working Capital is Rs 90,000. Calculate the amount of Current Assets and Current Liabilities.

Current Ratio= `\frac{Current     asset}{Current     liabilities}`

Or, 3.5 = `\frac{Current     asset}{Current     liabilities}`

or, Current Assets = 3.5 Current Liabilities (1) 

Working Capital = Current Assets – Current Liabilities 

Working Capital = 90,000 

or, Current Assets – Current Liabilities = 90,000 

or, 3.5 = Current Liabilities – Current Liabilities = 90,000 (from I) 

or, 2.5 Current Liabilities = `\frac{90,000}{2.5}`

                                             = 36,000

or Current Assets = 3.5

 Current Liabilities  = 3.5 × 36,000 = 1,26,000

Chapter-5 Accounting Ratios-II

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