Question

Current ratio of a company is 3 : 1. The value of its current liabilities is ₹ 4,00,000. Its current assets will be ______.

Options

• ₹ 3,00,000

• ₹ 12,00,000

• ₹ 2,00,000

• ₹ 9,00,000

Answer 1

Current ratio of a company is 3 : 1. The value of its current liabilities is ₹ 4,00,000. Its current assets will be ₹ 12,00,000.

Explanation:

Current Ratio = `"Current Assets"/"Current Liabilities"`

3 : 1 = `"Current Assets"/(4,00,000)`

3 × 4,00,000 = Current Assets

Current Assets = ₹ 12,00,000