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

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