The current ratio is calculated as:
A)current assets divided by total liabilities.
B)current assets divided by current liabilities.
C)current assets times current liabilities.
D)total assets divided by total liabilities.

Question

Quizplus · Accepted Answer

The current ratio measures a company's ability to meet its short-term debts with its current assets. It is calculated by dividing the current assets by the current liabilities. Therefore, the answer is B - current assets divided by current liabilities.

The Current Ratio Is Calculated As