Massive Discount Emporium has current assets of $250,000, including cash of $50,000, marketable securities of $20,000, and receivables of $50,000. Current liabilities are $125,000 and long-term liabilities are $100,000. Calculate its current ratio.

Question

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. Here, current assets are $250,000 and current liabilities are $125,000. So, the current ratio = $250,000 / $125,000 = 2.00.

Massive Discount Emporium Has Current Assets of $250,000, Including Cash