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If Y Company Ltd.’s inventory is $60,000; total current liabilities are $1,20,000; Quick Ratio is 2:1, calculate Current Ratio.

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Question added by VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.
Date Posted: 2015/03/18
Ahmed kandil
by Ahmed kandil , Cost Controller , Battour Holding Cpompany

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

 

Mark Angelo Damuag
by Mark Angelo Damuag , Financial Analyst , Evacare Management Consultancy Inc

The current ratiois2.5:1 of which the total current assets is300,000 divided by total current liabilities of120,000

Sahar Alech
by Sahar Alech , Auditor / Financial Manager , Accounting Services Office

(CA inventory)/LIAB=2/1 CA-60000)/120000=2 CA =180000 Currrent ratio =180000/120000 CR =3/2

Muhammad Ramzan Tufail  ACCA
by Muhammad Ramzan Tufail ACCA , Assistant Finance Manager , Eltizam Asset Management Group

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

 

Chandrashekhar Naini
by Chandrashekhar Naini , Head IT , Tech Mahindra Business Services Ltd

Current Ratio is2.5 :1

Quick Ratio = Current Ratio - (Inventory / Liabilities)

Current Ratio =2 + (60000/120000) =2.5

Malik Khalid Mahmood
by Malik Khalid Mahmood , Regional Finance Manager , Leosons International FZ LLC

2.5:1 as agreed with others

Soumya Kanta Nayak
by Soumya Kanta Nayak , Branch Manager , ICICI Bank Ltd

QR = (CA-Inventory)/CL

 (CA-60000)=240000

CA=300000

CR=5:2

Anas  Dawah
by Anas Dawah , Senior Internal Auditor , Talal Abu-Ghazaleh Global (TAGI)

Current Assets =2*1200000+60=2460000

current ratio =2460000/1200000 =2.05

Mir Mujtaba Ali
by Mir Mujtaba Ali , Internal Audit Manager , Confidential

current assets =240,000+60,000 =300,000

Current Ratio is2.5 :1

MUHAMMED HARIS MI
by MUHAMMED HARIS MI , Senior Audit Staff , Saud Bahwan Group LLC.

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

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