A corporation reports the following year-end balance sheet data.

-The company's current ratio equals:
A)0.58
B)1.27
C)2.07
D)0.37
E)0.63

Question

A corporation reports the following year-end balance sheet data.

-The company's current ratio equals: 
A)0.58 
B)1.27 
C)2.07 
D)0.37 
E)0.63

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. In this case, the current assets are $71,000 and the current liabilities are $34,200. Therefore, the current ratio is:

Current Ratio = Current Assets / Current Liabilities
Current Ratio = $71,000 / $34,200
Current Ratio = 2.07

Therefore, the correct choice is C, with a current ratio of 2.07.

A Corporation Reports the Following Year-End Balance Sheet Data