Assume a company has a current ratio of 1.5 and working capital equal to $25,000.If the company's current liabilities are equal to $50,000,its total current assets are:
A) $7,500
B) $25,000
C) $75,000
D) $37,500

Question

Quizplus · Accepted Answer

The current ratio is calculated as current assets divided by current liabilities. Given a current ratio of 1.5 and current liabilities of $50,000, the current assets are 1.5 times $50,000, which equals $75,000.

Assume a Company Has a Current Ratio of 1