The 'current ratio' is usually calculated as:
A) current assets minus goodwill ÷ current liabilities
B) current assets ÷ current liabilities
C) current assets excluding inventory ÷ current liabilities
D) current liabilities ÷ current assets

Question

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. This ratio measures a company's ability to pay its short-term liabilities with its short-term assets. Therefore, option B is the correct calculation for the current ratio.

The 'Current Ratio' Is Usually Calculated As