Question : The Current Liabilities of a Company are Rs.7,00,000. Its current ratio is 3.5: 1 and its acid test ratio is 1.5: 1. The value of Current assets, Liquid assets and Inventories are
Option 1: Current assets 10,50,000. Liquid assets 6,12,500. Stock 4,37,500
Option 2: Current assets 10,50,000. Liquid assets 6,22,500, stock 4,27,500
Option 3: Current assets 6,22,500. Liquid assets Rs 10,50,000. Stock 4,27,500
Option 4: Current assets24,50,000, liquid assets 10,50,000. Stock 14,00,000
Correct Answer: Current assets24,50,000, liquid assets 10,50,000. Stock 14,00,000
Solution : Answer = Current assets 24,50,000, liquid assets 10,50,000. Stock 14,00,000
Acid test Ratio/ Quick Ratio = Quick Assets/ Current Liabilities
$\frac{1.5}{1}$=$\frac{\text{Quick Assets}}{7,00,000}$
Quick Assets = 7,00,000 x 1.5 = 10,50,000
C.Ratio = $\frac{C.Assets}{C.liab.}$= $\frac{3.5}{1}$= $\frac{C.Assets}{7,00,000}$
C.A. = 24,50,000
Stock = 24,50,000 - 10,50,000= 14,00,000 Hence, the correct option is 4.
Question : A firm has a Current Ratio of 3.5: 1 and a Quick Ratio of 2: 1. If its inventory is Rs.75,000, total current assets and total current liabilities are
Question : Which of the following is the correct formula for "Current Ratio"?
Question : ---------------------ratio explains the relationship between current assets and current liabilities of a business.
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