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Question
From the information given below, calculate the circulating capital of a company:
| Assets | (₹) | Liabilities | (₹) |
| Stock | 60,000 | Trade payables | 20,000 |
| Debtors | 55,000 | Short-term loans | 10,000 |
| Cash | 65,000 | Outstanding expenses | 5,000 |
| Short-term investments | 20,000 |
Options
₹ 35,000
₹ 1,65,000
₹ 2,00,000
₹ 2,35,000
MCQ
Solution
₹ 1,65,000
Explanation:
Circulating Capital or Gross Working Capital = Total Current Assets
= Stock + Debtors + Cash + Short-term Investments
= 60,000 + 55,000 + 65,000 + 20,000
= Rs. 2,00,000
Current Liabilities:
Total Current Liabilities = 20,000 + 10,000 + 5,000
= ₹ 35,000
Circulating Capital:
Circulating Capital = Total Current Assets − Total Current Liabilities
Circulating Capital = ₹ 2,00,000 − ₹ 35,000
= ₹ 1,65,000
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