Shares outstanding of common stock = 1,000,000
Shares outstanding of preferred stock = 500,000
Market price of common stock = $18.
-The Current Ratio is:
A) 1.83
B) 0.183
C) 0.55
D) 0.35

Question

Shares outstanding of common stock = 1,000,000 
Shares outstanding of preferred stock = 500,000 
Market price of common stock = $18.
-The Current Ratio is:
A) 1.83 
B) 0.183 
C) 0.55 
D) 0.35

Quizplus · Accepted Answer

The Current Ratio is calculated by dividing current assets by current liabilities. A ratio of 1.83 indicates that the company has $1.83 in current assets for every $1 of current liabilities, suggesting a healthy liquidity position. This is a typical financial metric used to assess a company's ability to meet its short-term obligations.

Shares Outstanding of Common Stock = 1,000,000