Current Ratio is 2.5, Working Capital is Rs. 1,50,000. Calculate the amount of Current Assets and Current Liabilities.

SOLUTION

Current Ratio = Current Assets  /  Current Liabilities
2.5 = Current Assets  /  Current Liabilities
Current Assets = 2.5 × Current Liabilities

Working Capital = Current Assets – Current Liabilities

1,50,000 = 2.5 × Current Liabilities – 1.0 Current Liabilities
1,50,000 = 1.5 × Current Liabilities

Current Liabilities = 1,50,000 / 1.5
Current Liabilities = Rs. 1,00,000

Current Assets = 2.5 × Current Liabilities
Current Assets = 2.5 × 100,000
Current Assets  = Rs. 2,50,000


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