X Ltd. has a Current Ratio of 3.5:1 and a Quick Ratio of 2: 1. If the excess of current assets over quick assets represented by inventories is ₹24,000. Calculate current liabilities.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → ₹16,000
Inventories are the difference between current assets and quick assets. With both ratios measured against the same current liabilities, the gap between the two ratios stands for the inventories.
Let current liabilities = x
Current assets = 3.5x and quick assets = 2x
Inventories = 3.5x − 2x = 1.5x = ₹24,000
x = ₹24,000 / 1.5 = ₹16,000
₹56,000 (3.5 × ₹16,000) is the current assets, not the current liabilities.
NCERT (2026-27 edition):
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