A company has cash of $215,000;short-term investments of $45,000;net receivables of $75,000;and inventory of $100,000.Current liabilities total $80,000.The current ratio is:

Question

Quizplus · Accepted Answer

Current assets = cash + short-term investments + net receivables + inventory
Current assets = $215,000 + $45,000 + $75,000 + $100,000
Current assets = $435,000

Current ratio = current assets / current liabilities
Current ratio = $435,000 / $80,000
Current ratio = 5.44:1

Therefore, the best choice is C and the current ratio is 5.44:1.

A Company Has Cash of $215,000;short-Term Investments of $45,000;net Receivables