BUISENESS MANAGEMENT
RISK MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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If the Total of Current Assets is Rs. 168 lakh and Total Current Liabilities is Rs. 142.68 lakh, then what will the amount of long term funds, which are supporting the financing of current assets?
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Rs. 26.32 lakh
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Rs. 25.32 lakh
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Rs. 24.32 lakh
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Can’t be calculated from the given information
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Explanation:
Detailed explanation-1: -Net working capital is the aggregate amount of all current assets minus current liabilities.
Detailed explanation-2: -Current ratio (Current Assets / Current Liabilities) Quick ratio = [(Current Assets – Inventory + Prepaid Expenses) / Current Liabilities] Net working capital = (Current Assets – Current Liabilities)
Detailed explanation-3: -Now let us increase the current assets and current liabilities by Rs. 100000 and calculate the new current ratio; Current ratio = 300000/200000 = 1.5:1.
Detailed explanation-4: -6, 00, 000) to Current Liabilities (Rs. 4, 00, 000) is 1.5 : 1.
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