If the current ratio is 2.5 to 1, net income is $6,000, and current liabilities are $18,000, how much is working capital?
A)$ 6,000
B)$ 24,000
C)$ 27,000
D)$ 45,000

Question

Quizplus · Accepted Answer

Current Ratio = Current Assets / Current Liabilities

2.5 = Current Assets / 18,000

Current Assets = 2.5 x 18,000

Current Assets = 45,000

Working Capital = Current Assets - Current Liabilities

Working Capital = 45,000 - 18,000

Working Capital = $27,000

If the Current Ratio Is 2