Calculate the current ratio from the following information: Sales = $14,000
Bills receivable = $100,000
Cash in hand = $40,000
Current liabilities = $50,000
Inventories = $40,000
Net Income = $5,600
A) 8:5
B) 3.6:1
C) 0.4:1
D) 3:5
E) 2:3

Question

Quizplus · Accepted Answer

Current Ratio = Current Assets / Current Liabilities

Current Assets = Bills receivable + Cash in hand + Inventories = $100,000 + $40,000 + $40,000 = $180,000

Current Ratio = $180,000 / $50,000 = 3.6:1

Calculate the Current Ratio from the Following Information: Sales =