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The difference between current Ratio and acid ratio is inventory so we need to do the following
acid ratio =2:1 , because current liabilities is120000
current assets exclude inventory is240000
... thus total current assets will be240000+60000=300000
The current ratiois2.5:1 of which the total current assets is300,000 divided by total current liabilities of120,000
Current Ratio = Current Assets / Current Liablities
Current Asset = ?
So, Quick Ratio is2 = C.A -60,000 /120,000
2 *120,000 = C.A -60,000
240,000 = C.A -60,000
Current Asset =240,000 +60,000
So, Current Asset =300,000
And Now use this for current ratio:
Current Ratio =300,000 /120,000
So, the Current Ratio is =2.5:1
Current Ratio is2.5 :1
Quick Ratio = Current Ratio - (Inventory / Liabilities)
Current Ratio =2 + (60000/120000) =2.5
2.5:1 as agreed with others
QR = (CA-Inventory)/CL
(CA-60000)=240000
CA=300000
CR=5:2
Current Assets =2*1200000+60=2460000
current ratio =2460000/1200000 =2.05
current assets =240,000+60,000 =300,000
Current Ratio is2.5 :1
In my calculation
C.A=300,000 (240000 +60000) W e can get this figure from Quick ratio
C.L=120,000 (al ready given)
Current ratio=C.A / C.L
i.e300,000/120000=2.5:1
So,the Current Ratio is=2.5:1