Motor Works has total assets of $919,200,long-term debt of $264,500,total equity of $466,900,net fixed assets of $682,800,and sales of $1,021,500.The profit margin is 6.2 percent.What is the current ratio?
A).79
B).84
C)1.01
D)1.26
E)1.19

Question

Quizplus · Accepted Answer

To find the current ratio, we first need to calculate the current assets and current liabilities. Total assets are $919,200, and net fixed assets are $682,800, so current assets = $919,200 - $682,800 = $236,400. Total equity is $466,900, and long-term debt is $264,500, so total liabilities = $919,200 - $466,900 = $452,300. Current liabilities = total liabilities - long-term debt = $452,300 - $264,500 = $187,800. Current ratio = current assets / current liabilities = $236,400 / $187,800 ≈ 1.26.

Motor Works Has Total Assets of $919,200,long-Term Debt of $264,500,total