A firm has current Ratio of 4:1 and Quick Ratiio of 2.5:1. Assuing Inventores are 22500, find out total Current Assets and total Current Liablities.

Explanation

Calculation of current assets and current liabilities
let current liabilities (CL) be x
Current Ratio is 4:1 hence Current Assets or Quick Assets = 2.5x
Quick assets +Inventories=current assets
2.5x+Rs 22500=4x
1.5 x=Rs22500
`x=(Rs 22500)/(1.5)=Rs 15000`
Thus , Current Liabilities =Rs 15000,
`Current Assets =Rs 15000xx4=Rs 60000`