A firm rsquo s current ratio is 3 5 2 Its current liabilities are Rs 80 000 Its working capital will...........

General Accounting Principles Ratio analysis

A firm’s current ratio is 3.5 : 2. Its current liabilities are Rs 80,000. Its working capital will be :

Rs 1,20,000

Rs 1,60,000

Rs 60,000

Rs 2,80,000

current ratio is 3.5 : 2. Its current liabilities are Rs 80,000

working capital= current assets - current liabilities

= Rs.1,40,000-Rs.80,000=Rs.60,000(answer)

Working Note 1 for current assets

Current assets = liquid Assets/ current liabilities

current Assets = current ratio

Current liabilities

X =3.5

Rs. 80,000 2

current assets=Rs.80,000 * 3.5 =Rs.2,80,000 = Rs. 1,40,000

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