The MediaX company has current assets of $565,000 and current liabilities of $342,000 (565,000/343,000 = 1.65). What does this current ratio mean?
A) MediaX has 65 percent more current liabilities than current assets.
B) MediaX has 165 percent more current liabilities than current assets.
C) MediaX has 65 percent more current assets than current liabilities.
D) MediaX has 165 percent more current assets than current liabilities.

Question

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. In this case, the current ratio is 1.65, which means that MediaX has 65% more current assets than current liabilities.

The MediaX Company Has Current Assets of $565,000 and Current