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O.M. Ltd has a Current Ratio of 3.5:1 and Quick Ratio of 2:1. If the excess of Current Assets over Quick Assets as represented by Stock is Rs 1,50,000, calculate Current Assets and Current Liabilities.

Answer

Current ratio= current assets/current liabilities=3.5
Current assets =3.5 current liabilities 
Quick ratio= quick assets/ current liabilities=2
Quick assets= current assets- stock
(3.5 current liabilities-150000)/current liabilities=2
3.5 current liabilities-150000=2 current liabilities
3.5 Current liabilities-2 current liabilities = 150000
1.5 current liabilities= 150000
Current liabilities = 150000/1.5= 100000
Current assets=3.5*100000=350000