A kennel designed for boarding small dogs has current assets of $8,000, current liabilities of $2,000, and fixed assets of $25,000.The small company has a current ratio of:
A)2.5
B)4
C)8
D)25
E)40

Question

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. In this case, $8,000 (current assets) / $2,000 (current liabilities) = 4.

A Kennel Designed for Boarding Small Dogs Has Current Assets