Question : A Company’s Current Ratio is 3: 1 and Liquid Ratio is 2: 1. If its Current Liabilities are Rs.2,00,000, what will be the value of Inventory?
Option 1: Rs.4,00,000
Option 2: Rs.3,00,000
Option 3: Rs.2,00,000
Option 4: Rs.5,00,000
Answer (1)
19th Jan, 2024
Correct Answer: Rs.2,00,000
Solution :
Current Liabilities = 2,00,000; Inventory = ?; Current Ratio = 2:1
Current Ratio = Current Assets/ Current liability
3:1=Current Assets/₹2,00,000
Current Assets= 6,00,000
Liquid Ratio = Liquid Assets/Current liability
2:1=Liquid Assets/2,00,000
Liquid Assets = 4,00,000
Stock = 6,00,000 - 4,00,000 = 2,00,000
Hence option 3 is the correct answer.
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