a business has a current ratio of 3:1 and quick ratio 1.2:1.if the working capital is 180000,calculate the total current assets and inventory. Share with your friends Share 2 Nikhil Sehgal answered this (i) Working Capital=Current Asset-Current LiabilitiesCurrent Ratio=3:1⇒Working Capital=2Now, If Working Capital is 2, Current Assets = 3If Working Capital is 1, Current Assets=32and if Working Capital is 1,80,000, Current Assets=32×1,80,000=Rs 2,70,000(ii)Current Liabilities=Current Assets-Working Capital=2,70,000-1,80,000=90,000(iii) Quick Ratio=Liquid AssetsCurrent Liabilities⇒1.2=Liquid Assets90,000Therefore, Liquid Assets= 90,000×1.2=Rs 1,08,000So, Inventory=Current Assets-Liquid Assets=2,70,000-1,08,000=Rs 1,62,000 -1 View Full Answer
