Question
A firm has a current ratio of 2:1 and quick ratio of
1.2:1. Its inventory is valued at ₹4 lakh. What is the amount of current liabilities?Solution
Let current liabilities = x Current assets = 2x Quick assets = 1.2x Thus, Inventory = Current assets – Quick assets = 2x – 1.2x = 0.8x = ₹4 lakh ⇒ x = ₹5 lakh
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