Calculate current assets of a company from the following information:
Inventory turnover ratio = 4 times
Inventory at the end is Rs. 20,000 more than the inventory in the beginning. Revenue from Operations Rs. 3,00,000 and gross profit ratio is 20% of revenue from operations.
Current liabilities = Rs. 40,000
Quick ratio = 0.75 : 1
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Rs. 1,00,000
Current assets = quick assets + inventory. Quick assets come from the quick ratio, and closing inventory from the inventory turnover ratio.
Closing inventory:
Gross profit = 20% of 3,00,000 = Rs. 60,000
Cost of revenue from operations = 3,00,000 − 60,000 = Rs. 2,40,000
Inventory turnover ratio = Cost of revenue from operations ÷ Average inventory
Average inventory = 2,40,000 ÷ 4 = Rs. 60,000
Opening + Closing = 2 × 60,000 = Rs. 1,20,000
Closing = Opening + 20,000
Opening = (1,20,000 − 20,000) ÷ 2 = Rs. 50,000
Closing inventory = 50,000 + 20,000 = Rs. 70,000
Quick assets:
Quick ratio = Quick assets ÷ Current liabilities
Quick assets = 0.75 × 40,000 = Rs. 30,000
Current assets = 30,000 + 70,000 = Rs. 1,00,000
Note: This question is from NCERT (2026-27). NTA sets numerical questions from NCERT too, so do not ignore NCERT while practising numericals.
NCERT (2026-27 edition):
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