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# If working capital is current assets minus current liabilities, then

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Re: If working capital is current assets minus current liabilities, then [#permalink]
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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