If Tommy's Subs Company has a current ratio of 2.5 and current assets of $195,000,the amount of working capital is
A)$117,000.
B)$330,000.
C)$380,000.
D)$78,000.

Question

Quizplus · Accepted Answer

Working capital can be calculated by subtracting current liabilities from current assets. However, the current liabilities information is not provided in this question.

We can still use the given information to find the working capital using the formula:

Working capital = Current assets / Current ratio

Working capital = $195,000 / 2.5

Working capital = $78,000

Therefore, the answer is (D) $78,000.

If Tommy's Subs Company Has a Current Ratio of 2