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

Question

Quizplus · Accepted Answer

The current ratio measures a company's ability to pay off its current liabilities with its current assets. Therefore, the correct formula for calculating the current ratio is dividing current assets by current liabilities.

The Current Ratio Is Calculated As