# Financial Management

A company has current assets of \$3 million. The company's current ratio is 1.5 and it's quick ratio is 1.0. What amount of current liabilities does the company have? What amount of the company's current assets is represented by inventory?

#### joe fagan Profile Answers by joe fagan

• Oct 29th, 2008

A company has current assets of \$3 million. The company's current ratio is 1.5 and it's quick ratio is 1.0. What amount of current liabilities does the company have? What amount of the company's current assets is represented by inventory?

Current assets/Current Liabilities =1.5
(Current assets minus inventory)/Current Liabilities =1

Thus
Current Liabilities = 2 m
Inventory = 1 m

#### vivek bond Profile Answers by vivek bond

• Dec 5th, 2008

current asset is \$3billion
so, current ratio = current assset current liabilities

1.5 = 3 / current liabilities

current liabilities 1.5 = 3

hence current liabilties is \$2 billion

Now, quick ratio = quick asset / current liabilities

1.0 = quick asset /  2
quick asset is 2

now.......... quick asset = current asset -  stock

2 = 3 - stock

stock =  3 - 2 = 1

so........stock(inventory)  is \$ 1 billion      .  