The current Ratio of a firm is 2.5: 1 and its Current Liabilities are ₹4,00,000 of a company. What will be its current assets?
Answer & explanation
Correct answer: option 2
The correct answer is option 2- ₹10,00,000.
Current ratio = Current assets/ Current liabilities
Current ratio = 2.5:1
CA/CL = 2.5/1
CA/4,00,000= 2.5/1
CA = 4,00,000 X 2.5
CA= ₹10,00,000
So, current assets are ₹10,00,000.