# Current Liabilities of a company are Rs. 75,000. If current ratio is 4 : 1 and Liquid Ratio is 1: 1, calculate value of Current Assets,

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Current Liabilities of a company are Rs. 75,000. If current ratio is 4 : 1 and Liquid Ratio is 1: 1, calculate value of Current Assets, Liquid Assets and Inventory.

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Current Ratio = $\frac {\textit{Current assets}}{\textit{Current Liabilities}}$

or, 4 = $\frac {\textit{Current assets}}{\textit{75,000}}$

or, 4 × 75,000 = Current Assets

or, Current Assets = 3,00,000

Liquid Ratio = $\frac {\textit{Liquid assets}}{\textit{Current Liabilites}}$

Or, 1 = $\frac {\textit{Liquid assets}}{\textit{75,000}}$

Current liabilities

Liquid Assets = 75,000

Stock = Current Assets -Liquid Assets

= 3,00,000 – 75,000 = 2,25,000