Question

A trader has current assets of ₹6,00,000, including ₹80,000 cash, ₹1,20,000 accounts receivable, ₹3,00,000 inventory, and ₹1,00,000 marketable securities. Current liabilities total ₹2,50,000, of which ₹50,000 are short-term bank loans and the rest are trade payables. Calculate the net working capital and comment on the firm’s short-term liquidity position.

A NWC = ₹3,50,000 – Weak liquidity
B NWC = ₹3,50,000 – Strong liquidity
C NWC = ₹3,50,000 – Moderate liquidity
D NWC = ₹3,00,000 – Strong liquidity
E NWC = ₹4,00,000 – Weak liquidity
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