Question
If Current Ratio of N Ltd. is 2.5: 1 and its Current
Liabilities are Rs.800, 000. Working Capital will be?Solution
Current Ratio = Current Assets / Current Liabilities 2.5 = Current Assets / Rs. 800,000 Current Assets = 2.5 * Rs. 800,000 Current Assets = Rs. 2,000,000 Working Capital = Current Assets - Current Liabilities Working Capital = Rs. 2,000,000 - Rs. 800,000 Working Capital = Rs. 1,200,000 Therefore, the correct answer is Rs. 1,200,000.
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