In order to calculate the current ratio for your firm,you divide the total value of current assets by:

Question

Quizplus · Accepted Answer

The current ratio is calculated by dividing the total value of current assets by the total value of current liabilities. This ratio gives an indication of a company's ability to meet its short-term obligations. Answer A is incorrect as earnings per share is not related to the current ratio. Answer C is incorrect as the total owners' equity is not a factor in calculating the current ratio. Answer D is incorrect as the total cost of goods sold is not relevant in calculating the current ratio.

In Order to Calculate the Current Ratio for Your Firm,you