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Question
Current liabilities of a company are Rs 75,000. If current ratio is 4:1 and liquid ratio is 1:1, calculate value of current assets, liquid assets and inventory.
Solution
`"Current Ratio" = "Current Assets"/"Current Liablities"`
`or,4 = "Current Assets"/"75,000"`
or, 4 × 75,000 = Current Assets
or, Current Assets = 3,00,000
`"Liquid Ratio" = "Liquid Aseets"/"Current Liablities"`
or, `1 = "Liquid Assets"/"75,000"`
Liquid Assets = 75,000
Inventory = Current Assets − Liquid Assets
= 3,00,000 − 75,000
= 2,25,000
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||
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