Margaret has $5,000 in her checking account, a home with a market value of $175,000, and stocks valued at $10,000. Margaret also has credit card debt of $15,000. Margaret's liquidity ratio is

Question

Quizplus · Accepted Answer

The liquidity ratio is calculated by dividing liquid assets by current liabilities. Margaret's liquid assets are $5,000 (checking account), and her current liabilities are $15,000 (credit card debt). Therefore, the liquidity ratio is $5,000 / $15,000 = 0.33.

Margaret Has $5,000 in Her Checking Account, a Home with a Market