A company has total assets of $120,000, current assets of $80,000, total liabilities of $50,000, and current liabilities of $25,000. What is the current ratio?
A) 4.80 to 1
B) 3.20 to 1
C) 2.40 to 1
D) 1.60 to 1

Question

Quizplus · Accepted Answer

The current ratio is calculated by dividing the current assets by the current liabilities.

Current Ratio = Current Assets / Current Liabilities

In this case: 
Current Ratio = $80,000 / $25,000 
Current Ratio = 3.20 to 1

Therefore, the best choice is B, 3.20 to 1.

A Company Has Total Assets of $120,000, Current Assets of $80,000