Calculate the current ratio given the following information: cash = $4,000; total current assets = $21,000; cash ratio = 0.40.
A) 2.09
B) 2.10
C) 2.11
D) 2.12
E) 2.13

Question

Quizplus · Accepted Answer

The cash ratio is calculated as cash divided by total current liabilities. Given the cash ratio of 0.40 and cash of $4,000, total current liabilities can be calculated as $4,000 / 0.40 = $10,000. The current ratio is total current assets divided by total current liabilities, which is $21,000 / $10,000 = 2.10.

Calculate the Current Ratio Given the Following Information: Cash =