Barts Industries, Inc., has $30,000 in cash, $15,000 in short- term investments, $75,000 in net current receivables, and $12,000 in prepaid expenses. The total current liabilities of the firm are $90,000. Barts Industries' current ratio is:

Question

Quizplus · Accepted Answer

The current ratio is calculated as (Current Assets / Current Liabilities). Current Assets = $30,000 (cash) + $15,000 (short-term investments) + $75,000 (net current receivables) + $12,000 (prepaid expenses) = $132,000. Current Liabilities = $90,000. Current Ratio = $132,000 / $90,000 = 1.46.