Mehgna Company's working capital was Tk. 40,000 and total current liabilities were 1/4 of that amount. The current ratio was :
Created: 6 years ago |
Updated: 3 years ago
best ans
Working Capital = 40, 000. Here Current Liability = 1/4 of 40000 = 10000.
We know,
working Capital = Current Asset - Current Liability
or, 40000 = Current Asset - 10000
or, Current Asset = 50000
So, Current Ratio = Current Asset / Current Liability
or, Current Ration = 50000 / 10000
Current Ratio = 5/1 or 5 to 1
Md Azizur Rahman
Founder of Satt
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