The current ratio is calculated as:
A) total assets / total liabilities
B) current assets / total liabilities
C) current assets × current liabilities
D) current assets / current liabilities

Question

Quizplus · Accepted Answer

The current ratio compares a company's current assets to its current liabilities to determine its ability to pay short-term obligations. Therefore, the correct formula for calculating it is current assets divided by current liabilities.

The Current Ratio Is Calculated As