A firm's current ratio is 3.5 : 2. Its current liabilities are 80,000. Its working capital will be :
Options:
₹1,20,000
₹1,60,000
₹60,000
₹2,80,000
Correct Answer:
₹60,000
Explanation:
Current ratio is 3.5 : 2. and Current liabilities are 80,000 Current ratio = Current assets/ Current liabilities 3.5/2 = CA/80000 Current assets = 3.5/2 x 80000 = 140000 Working capital = Current assets - Current liabilities = 140000-80000 =₹60000