Donny Dell Inc.'s cost of goods sold were $4,526. They had net working capital of $70 and total current assets were $400. If inventory was 62 what is the current ratio of Donny Dell?

Question

Quizplus · Accepted Answer

The current ratio is calculated as Current Assets / Current Liabilities. Given that total current assets are $400 and net working capital (Current Assets - Current Liabilities) is $70, we can find Current Liabilities = Current Assets - Net Working Capital = $400 - $70 = $330. Therefore, the current ratio = $400 / $330 = 1.21.