Homework Answers
| a) | ||||
| we know that current ratio = Current asset / Current liabilities | ||||
| Therefore | ||||
| Current asset / Current liabilities = | 2.5 | |||
| Current liabilities = 6000000/2.5 | ||||
| Current liabilities | 2400000 | |||
| b) | ||||
| Given that quick ratio = | 2 | |||
| this means | ||||
| (Current asset - inventory)/ Current liabilities = | 2 | |||
| =(6000000-inventory)/2400000= | 2 | |||
| inventory = | 6000000-4800000 | |||
| inventory = | 1200000 | |||
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