Shine Limited Has a Current Ratio 4.5:1 And Quick Ratio 3:1; If The Inventory Is 36,000, Calculate Current Liabilities And Current Assets.

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Shine Limited has a current ratio 4.5:1 and quick ratio 3:1; if the inventory is 36,000, calculate current liabilities and current assets.





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

                     or,`\frac{4.1}{1}`   =  `\frac{Current    asset}{Current    liabilities}`


or,4.5 Current  Liabilities = Current Asset

Quick  Ratio = `\frac{Quick  Asset}{Current   liabilities}`

or,3.1 = `\frac{Quick  Asset}{Current  liabilities}`


or, 3 Current Liabilities = Quick Asset

Quick Asset = Current Asset - Inventory = Current Asset - 36,000

Current Asset - Quick Asset = 36,000

or, 4.5 Current Liabilities - 3  Current Liabilities = 36,000

or, 1.5 Current Liabilities = 36,000

or, Current Liabilities = 24,000

Current Asset= 4.5 Current liabilities

or, Current Asset= 4.5 ❌ 24,000

                           = 1,08,000

Chapter-5 Accounting Ratios-II



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