Which of the following statements is an accurate interpretation of a current ratio of 2.5?
A) The company has $2.50 of current assets for every $1.00 of liabilities.
B) The company has $2.00 of current assets for every $.50 of liabilities.
C) The company has $2.00 of current assets for every $.50 of current liabilities.
D) The company has $2.50 of current assets for every $1.00 of current liabilities.

Question

Quizplus · Accepted Answer

The current ratio is calculated as current assets divided by current liabilities. A current ratio of 2.5 means the company has $2.50 in current assets for every $1.00 in current liabilities.

Which of the Following Statements Is an Accurate Interpretation of a Current