Dragin Company's working capital is $36,000 and its current liabilities are $61,000.The company's current ratio is closest to:
A) 0.41 to 1.
B) 0.59 to 1.
C) 1.59 to 1.
D) 2.69 to 1.

Question

Quizplus · Accepted Answer

The current ratio is calculated as current assets divided by current liabilities. Given working capital (current assets - current liabilities) is $36,000 and current liabilities are $61,000, current assets are $97,000. Thus, the current ratio is $97,000 / $61,000 = 1.59 to 1.

Dragin Company's Working Capital Is $36,000 and Its Current Liabilities