A business has current Ratio of 4:1 & a Quick Ratio of 1.2:1. If working capital is Rs. 180000. Calculate total current Assets and Stock.

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Current ratio= Current assets / current lia. = 4:1 So, CA= 4CL ... (1) Quick Ratio = Cash / current lia. = 1.2:1 So, Cash = 1.2CL... (2) and Net working capital = Current Assets - Current Liabity=180000...(3) From (1) CA= 4 CL = Cash + 2.8CL So, CA-2.8CL = Cash So, from (3) 180000-CL-2.8CL = Cash So,...
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Current ratio= Current assets / current lia. = 4:1 So, CA= 4CL ... (1) Quick Ratio = Cash / current lia. = 1.2:1 So, Cash = 1.2CL... (2) and Net working capital = Current Assets - Current Liabity=180000...(3) From (1) CA= 4 CL = Cash + 2.8CL So, CA-2.8CL = Cash So, from (3) 180000-CL-2.8CL= Cash So, 180000-3.8CL= Cash So, from (2) 180000-3.8CL = 1.2CL So, 180000=5CL So CL= 36000 So Cash = 1.2CL = 43200 So, CA = 180000-36000=144000 So, Stock = Total CA-Cash = 144000-43200=100800 read less
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Current Assets/ current liabilities =4 :1 Let CL is x so, CA is 4x so, working capital = CA-CL 180000= 4x -x 180000= 3x 180000/3 = 60000 current Assets = 4* 60000=240000. Quick Assets = quick assets /current liabilites = 1.2/1 since current liabilites is x Quick assets is 1.2x quick assts is 1.2*60000...
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Current Assets/ current liabilities =4 :1 Let CL is x so, CA is 4x so, working capital = CA-CL 180000= 4x -x 180000= 3x 180000/3 = 60000 current Assets = 4* 60000=240000. Quick Assets = quick assets /current liabilites = 1.2/1 since current liabilites is x Quick assets is 1.2x quick assts is 1.2*60000 = 72000 stock = CA- QA = 240000- 72000 = 168000 read less
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