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A business has a current ratio of 3:1 and a quick ratio of 1.2:1. If the working capital is Rs180000. Calculate the total current assets and inventory.?
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A business has a current ratio of 3:1 and a quick ratio of 1.2:1. If t...
Current Ratio=Current asset/Current liabilities=3/1(cross multiplication)
Current assets= 3Current liabilities.
Working capital = CA - CL
180000 = (3CL) - CL
180000 = 2CL
Current liabilities= 180000/2 = 90000.
Now,put the value of CL....
Current assets= 3 × 90000= 27000.
CURRENT ASSETS = 270000.
Liquid ratio = Liquid asset/current liabilities=1.2/1 (cross multiplication)
Liquid assets = 1.2Current liabilities
Liquid assets = 1.2 × 90000= 108000.
Liquid assts = Current assets - inventory
108000 = 270000 - inventory
Inventory = 270000 -108000 =162000.
Inventory = 162000.
Current assets= 3Current liabilities.
Working capital = CA - CL
180000 = (3CL) - CL
180000 = 2CL
Current liabilities= 180000/2 = 90000.
Now,put the value of CL....
Current assets= 3 × 90000= 27000.
CURRENT ASSETS = 270000.
Liquid ratio = Liquid asset/current liabilities=1.2/1 (cross multiplication)
Liquid assets = 1.2Current liabilities
Liquid assets = 1.2 × 90000= 108000.
Liquid assts = Current assets - inventory
108000 = 270000 - inventory
Inventory = 270000 -108000 =162000.
Inventory = 162000.
Community Answer
A business has a current ratio of 3:1 and a quick ratio of 1.2:1. If t...
Calculation of Current Assets and Inventory
Given Information:
- Current Ratio: 3:1
- Quick Ratio: 1.2:1
- Working Capital: Rs180000
Current Ratio:
The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year. It is calculated by dividing current assets by current liabilities.
Here, the current ratio is given as 3:1, which means that for every Rs3 of current assets, the company has Rs1 of current liabilities.
Let's assume that the current assets of the company are represented by '3x' and the current liabilities are represented by 'x'.
Therefore, the equation becomes:
3x/x = 3/1
3x = 3x
This equation is balanced, which means that the value of 'x' is equal to 'x'.
Now, we can calculate the total current assets of the company by multiplying the value of '3x' by the common value of 'x', which is equal to '3x'.
Total Current Assets = 3x = 3 * x = 3 * Rs180000 / 4
Total Current Assets = Rs135000
Quick Ratio:
The quick ratio is a liquidity ratio that measures a company's ability to meet its short-term obligations with its most liquid assets. It is calculated by dividing quick assets by current liabilities.
Here, the quick ratio is given as 1.2:1, which means that for every Rs1.2 of quick assets, the company has Rs1 of current liabilities.
Let's assume that the quick assets of the company are represented by '1.2x'.
Therefore, the equation becomes:
1.2x/x = 1.2/1
1.2x = 1.2x
This equation is balanced, which means that the value of 'x' is equal to 'x'.
Now, we can calculate the total quick assets of the company by multiplying the value of '1.2x' by the common value of 'x', which is equal to '1.2x'.
Total Quick Assets = 1.2x = 1.2 * x = 1.2 * Rs180000 / 4
Total Quick Assets = Rs54000
Now, we can calculate the inventory of the company by subtracting the total quick assets from the total current assets.
Inventory = Total Current Assets - Total Quick Assets
Inventory = Rs135000 - Rs54000
Inventory = Rs81000
Conclusion:
Thus, the total current assets of the company are Rs135000 and the inventory is Rs81000.
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A business has a current ratio of 3:1 and a quick ratio of 1.2:1. If the working capital is Rs180000. Calculate the total current assets and inventory.?
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A business has a current ratio of 3:1 and a quick ratio of 1.2:1. If the working capital is Rs180000. Calculate the total current assets and inventory.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A business has a current ratio of 3:1 and a quick ratio of 1.2:1. If the working capital is Rs180000. Calculate the total current assets and inventory.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A business has a current ratio of 3:1 and a quick ratio of 1.2:1. If the working capital is Rs180000. Calculate the total current assets and inventory.?.
A business has a current ratio of 3:1 and a quick ratio of 1.2:1. If the working capital is Rs180000. Calculate the total current assets and inventory.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A business has a current ratio of 3:1 and a quick ratio of 1.2:1. If the working capital is Rs180000. Calculate the total current assets and inventory.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A business has a current ratio of 3:1 and a quick ratio of 1.2:1. If the working capital is Rs180000. Calculate the total current assets and inventory.?.
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