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Re: If working capital is current assets minus current liabilities, then [#permalink]
basshead wrote:
If working capital is current assets minus current liabilities, then on January 1, 1985, Company C ’s current liabilities were what percent of its working capital?

A. 20%

B. 25%

C. 40%

D. 60%

E. 80%


Let CA (Current Asset) for Company C in Jan 1,1985 be 100
So, CL (Current Liability) will be 20

WC = CA - CL

Thus, Working Capital (WC) will be 80

Quote:
Company C ’s current liabilities were what percent of its working capital?
\(= \frac{20}{80}*100\)

\(= 25\)%, Answer must be (B)
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Re: If working capital is current assets minus current liabilities, then [#permalink]
Find: \(CL/WC\)
Given: \(WC=CA-CL\) and \(CL=0.2CA\)

\(CL/WC = CL/ (CA - CL)\)
\( 0.2CA/ (CA - 0.2CA) \)
\( 0.2CA/0.8CA = 0.25CA = 25{%}\)
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Re: If working capital is current assets minus current liabilities, then [#permalink]
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Re: If working capital is current assets minus current liabilities, then [#permalink]
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