A current ratio of 2.5 means that for every dollar of:
A)accounts payable,there is $2.50 of cash.
B)current liabilities,there is $2.50 of current assets.
C)current assets,there is $2.50 of current liabilities.
D)total liabilities,there is $2.50 of cash.

Question

Quizplus · Accepted Answer

Current ratio = Current assets ÷ Current liabilities
A current ratio of 2.5 indicates that there is $2.50 of current assets to cover every $1 of current liabilities.

A Current Ratio of 2