The current Ratio of a firm is 2.5: 1 and its Current Liabilities are ₹4,00,000. What will be its Working Capital?
Answer & explanation
Correct answer: option 4
Current ratio = 2.5:1
CA/CL = 2.5/1
CA/400000= 2.5/1
CA= ₹1000000
WORKING CAPITAL= CA-CL
= 1000000-400000
=₹600000