Calculate current assets of a company from the following information:
(i) Inventory turnover ratio: 4 Times.
(ii) Inventory at the end is Rs 20000 more than inventory in the beginning
(iii) Revenue from operatopms i.e Net sales Rs 300000
(iv) gross profit ratio 25%
(v) Current Liabilities Rs 40000
(vi) Quick Ratio 0.75

Explanation

Current assets =Quick assets + inventory
=Rs 30000+Rs 66250 =Rs 96250
Gross profit `=Rs 300000xx(25)/(100)=Rs 75000`
Cost of revenue from operation (cost of goods sold )
=Revenue from operations-Gross profit
=Rs 30000-Rs 750000=Rs 225000
Inventroy Turnover Ratio=`("Cost of Revenue from operation (cost of goods sold)")/("Average inventory")`
Average inventroy=`("opening inventory +closing inventory")/(2)`
Let the opening inventroy be x, closing inventory =x+Rs 20000
`4=((Rs 225000)/(x+x+Rs 2000))/(2)`
4x+4x+Rs 80000=Rs 450000
x=Rs 46250 (opening inventory)
Closing inventroy =Rs 46250+Rs 20000=Rs 66250
Quick ratio =`("Quick Assets")/("Current Liabilities")`
`0.75=("Quick assets") /(Rs 40000)`
Quick assets =Rs 30000.