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Question : The current ratio of the company is 5:2. If its working capital is Rs 1,20,000 its current liabilities will be

Option 1: Rs 80,000

Option 2: Rs 40,000

Option 3: Rs 1,00,000

Option 4: None of the above


Team Careers360 15th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: Rs 80,000


Solution : Answer = Rs 80,000

C.ratio = 5:2; Working Capital = 1,20,000

C.Ratio = $\frac{ C.A.}{C.Liab}$=  $\frac{5}{2}$

2 C.A. = 5 C.Liab.; C.A. = 2.5 Current Liab.

Working Capital = C.A. - C.liab

Current Liab =  $\frac{1,20,000}{2.5}$= 80,000.
Hence, the correct option is 1.

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