The following contains information from the records of the Wellborn Engineers and Architects.
- Which of the following statements is an accurate interpretation of the current ratio of Wellborn Engineers and Architects?
A)The company has $2.32 of current assets for every $1.00 of liabilities.
B)The company has $1.68 of current assets for every $1.00 of current liabilities.
C)The company has $1.58 of current assets for every $1.00 of liabilities.
D)The company has $0.59 of current assets for every $1.00 of current liabilities.

Question

The following contains information from the records of the Wellborn Engineers and Architects. 
- Which of the following statements is an accurate interpretation of the current ratio of Wellborn Engineers and Architects?
A)The company has $2.32 of current assets for every $1.00 of liabilities. 
B)The company has $1.68 of current assets for every $1.00 of current liabilities. 
C)The company has $1.58 of current assets for every $1.00 of liabilities. 
D)The company has $0.59 of current assets for every $1.00 of current liabilities.

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. In this case, the current assets are $1,680,000 and the current liabilities are $1,000,000, resulting in a current ratio of 1.68:1 or $1.68 of current assets for every $1.00 of current liabilities.

The Following Contains Information from the Records of the Wellborn