An efficient method is given to reconstruct the current profile parameters, the plasma shape, and a current profile consistent with the magnetohydrodynamic equilibrium constraint from external magnetic measurements, based on a Picard iteration approach which approximately conserves the measurements. Computational efforts are reduced by parametrizing the current profile linearly in terms of a number of physical parameters. Results of detailed comparative calculations and a sensitivity study are described. Illustrative calculations to reconstruct the current profiles and plasma shapes in ohmically and auxiliarily heated Doublet III plasmas are given which show many interesting features of the current profiles.