question archive Based on the following information, compute the (1) current ratio and (2) working capital
Based on the following information, compute the (1) current ratio and (2) working capital
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Based on the following information, compute the (1) current ratio and (2) working capital. Current assets 200.000.000 Total assets 900.000.000 Current liabilities 80,000,000 Total llabilities 500,000,000
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1. Current ratio = Current Assets / Current Liabilities
= 200,000,000 / 80,000,000
= 2.5
Answer : Current ratio = 2.5
2. Working capital is of two types : 1. Gross working capital 2. Net working capital
Gross working capital = Total of current assets
So Gross working capital = 200,000,000
Net working capital = Current Assets - Current Liabilities
Net working capital = 200,000,000 - 80,000,000
Net working capital = 120,000,000
Answer : Gross working capital = 200,000,000
Net working capital = 120,000,000
