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Working Capital=5,40,000 Current Ratio=2.8 and Inventory=3,30,000.Find Current Assets, Current Liabilities and Quick Ratio?
Most Upvoted Answer
Working Capital=5,40,000 Current Ratio=2.8 and Inventory=3,30,000.Find...
1) Current Assests = 840000
2) Current liabilities = 300000
3) Quick Ratio = 1.7
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Working Capital=5,40,000 Current Ratio=2.8 and Inventory=3,30,000.Find...
Working Capital:
Working capital is a financial metric that measures a company's short-term liquidity and operational efficiency. It is calculated by subtracting current liabilities from current assets. The formula for working capital is:

Working Capital = Current Assets - Current Liabilities

In this case, the working capital is given as 5,40,000.

Current Ratio:
The current ratio is a liquidity ratio that measures a company's ability to pay off its short-term liabilities with its short-term assets. It is calculated by dividing current assets by current liabilities. The formula for the current ratio is:

Current Ratio = Current Assets / Current Liabilities

In this case, the current ratio is given as 2.8.

Inventory:
Inventory is the goods and materials that a company holds for production, processing, or sale. It includes raw materials, work-in-progress, and finished goods. In this case, the inventory is given as 3,30,000.

Finding Current Assets:
To find the current assets, we can rearrange the formula for the current ratio as follows:

Current Assets = Current Ratio * Current Liabilities

Plugging in the values, we have:

Current Assets = 2.8 * Current Liabilities

Finding Current Liabilities:
To find the current liabilities, we can rearrange the formula for working capital as follows:

Current Liabilities = Current Assets - Working Capital

Plugging in the values, we have:

Current Liabilities = Current Assets - 5,40,000

Finding Quick Ratio:
The quick ratio, also known as the acid-test ratio, is a liquidity ratio that measures a company's ability to pay off its current liabilities without relying on the sale of inventory. It is calculated by subtracting inventory from current assets and then dividing the result by current liabilities. The formula for the quick ratio is:

Quick Ratio = (Current Assets - Inventory) / Current Liabilities

Plugging in the values, we have:

Quick Ratio = (Current Assets - 3,30,000) / Current Liabilities

Now that we have the formulas and values, we can calculate the current assets, current liabilities, and quick ratio.
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Working Capital=5,40,000 Current Ratio=2.8 and Inventory=3,30,000.Find Current Assets, Current Liabilities and Quick Ratio?
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Working Capital=5,40,000 Current Ratio=2.8 and Inventory=3,30,000.Find Current Assets, Current Liabilities and Quick Ratio? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Working Capital=5,40,000 Current Ratio=2.8 and Inventory=3,30,000.Find Current Assets, Current Liabilities and Quick Ratio? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Working Capital=5,40,000 Current Ratio=2.8 and Inventory=3,30,000.Find Current Assets, Current Liabilities and Quick Ratio?.
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