The following financial statement information is available for Houser Corporation: The current ratio for 2014 is
A) .40:1.
B) 2.5:1.
C) .31:1.
D) 4.24:1.

Question

The following financial statement information is available for Houser Corporation:  The current ratio for 2014 is
A) .40:1. 
B) 2.5:1. 
C) .31:1. 
D) 4.24:1.

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. From the balance sheet data given, current assets for 2014 are $125,000 and current liabilities are $50,000. Therefore, the current ratio is 125,000/50,000 = 2.5:1.

The Following Financial Statement Information Is Available for Houser Corporation