Using the following balance sheet and income statement data, what is the current ratio? $$\begin{array} { l c l l }
\text { Current assets } & \$ 32,000 & \text { Net income } & \$ 42,000 \
\text { Current liabilities } & 16,000 & \text { Stockholders' equity } & 78,000 \
\text { Average assets } & 160,000 & \text { Total liabilities } & 42,000 \
\text { Total assets } & 120,000 & & \
\text { Average common shares outstanding was } 15,000 .
\end{array}$$
A)2.0 : 1
B)2.6 : 1
C)0.5 : 1
D)2.9 : 1

Question

Using the following balance sheet and income statement data, what is the current ratio? $$\begin{array} { l c l l } 
\text { Current assets } & \$ 32,000 & \text { Net income } & \$ 42,000 \
\text { Current liabilities } & 16,000 & \text { Stockholders' equity } & 78,000 \
\text { Average assets } & 160,000 & \text { Total liabilities } & 42,000 \
\text { Total assets } & 120,000 & & \
\text { Average common shares outstanding was } 15,000 .
\end{array}$$
A)2.0 : 1
B)2.6 : 1
C)0.5 : 1
D)2.9 : 1

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. In this case, the current ratio is 32,000 / 16,000 = 2.0.

Using the Following Balance Sheet and Income Statement Data, What