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Hi,
Can you please explain how can I find the missing figure of the following current ratio calculation.
Inv: 3945
Rec: 8219
Payables: 3616The current ratio is 1.4 and the missing figure is the overdraft which is 5073.
How do I find 5073?
Many Thanks
The current assets are 3945 + 8219 = 12164
Since the current ratio is 1.4, the current liabilities must be 12164/1.4 = 8689
You know the payables, and so the overdraft is the remainder (8689 – 3616).
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