Mitchell Corporation has current assets of $1,600,000 and current liabilities of $750,000. If they issue $100,000 of new stock what will their new current ratio be? (rounded)
A) 2.27:1
B) 2.04:1
C) 1.88:1
D) 2.13:1

Question

Quizplus · Accepted Answer

Issuing $100,000 of new stock increases current assets to $1,700,000 while current liabilities remain $750,000. The new current ratio is $1,700,000 / $750,000 = 2.27:1.

Mitchell Corporation Has Current Assets of $1,600,000 and Current Liabilities