Faultless, Inc.
Selected data from Faultless' financial statements are provided below:
$\begin{array}{lcc}
&\underline{2012}&\underline{2011}\
\text { Current Assets } & \$ 6,000 & \$ 3,000 \
\text { Long-Term Assets } & 7,000 & 4,000 \
\text { Current Liabilities } & 2,000 & 3,000 \
\text { Long-Term Liabilities } & 7,000 & 0 \
\text { Stockholders' Equity } & 4,000 & 4,000 \
\text { Net Sales } & 9,500 & 9,100 \
\text { Net Income } & 1,000 & 5000
\end{array}$
-Refer to the financial information presented for Faultless, Inc. What is the company's current ratio for 2012?
A) 0.3
B) 3.0
C) 1.0
D) 0.9

Question

Faultless, Inc. 
Selected data from Faultless' financial statements are provided below:
$\begin{array}{lcc}
&\underline{2012}&\underline{2011}\
\text { Current Assets } & \$ 6,000 & \$ 3,000 \
\text { Long-Term Assets } & 7,000 & 4,000 \
\text { Current Liabilities } & 2,000 & 3,000 \
\text { Long-Term Liabilities } & 7,000 & 0 \
\text { Stockholders' Equity } & 4,000 & 4,000 \
\text { Net Sales } & 9,500 & 9,100 \
\text { Net Income } & 1,000 & 5000
\end{array}$
-Refer to the financial information presented for Faultless, Inc. What is the company's current ratio for 2012?
A) 0.3
B) 3.0
C) 1.0
D) 0.9

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. The correct ratio is 3.0, indicating that Faultless, Inc. has three times more current assets than current liabilities.

Faultless, Inc -Refer to the Financial Information Presented for Faultless, Inc