Wood Elf Ltd has provided a list of its assets and liabilities as at 31 December 2017 as follows:
- Long-Term Assets £1.8M
- Inventory £2.7M
- Accounts Receivables £1.5M
- Bank Account £0.4M
- Cash £0.1M
- Accounts Payable £2.9M
- Long-term Bank Loan £4M
- Reserves £1.5M
- Share Capital £1.0M
- Revenue £25.8M
- Cost-of-Sales £20.0M
- Net Profit Margin £2.5M
- Purchases £11.5M
What is Wood Elf’s Current Ratio (working capital ratio)?
Select ONE answer:
- 7.41
- 21.22
- 1.62
- 49.28
- 0.67
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This is multiple choice question is suitable for Accounting KS5 classes.
The answer is 3 – (£2.7M + £1.5M + £0.4M + £0.1M) / £2.9M = 1.62
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