Henry currently has $1,250 in monetary assets and also has $1,250 in current liabilities.What is his current ratio?
A)1 time
B)100 percent
C)1 percent
D)0

Question

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. In this case, the current assets and current liabilities are equal, so the current ratio is 1:1 or simply 1. A current ratio of less than 1 would indicate a potentially risky financial situation, while a current ratio greater than 1 would suggest a company has more current assets than liabilities and is in a stronger financial position.

Henry Currently Has $1,250 in Monetary Assets and Also Has