Which of the following will calculate the current ratio?
A) Current liabilities divided by current assets
B) Current assets divided by current liabilities
C) Current assets minus current liabilities
D) Current assets divided by total liabilities
E) Current liabilities minus current assets

Question

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. Option B is the only one that correctly calculates this ratio. Option A calculates the inverse, which is the quick ratio. Option C calculates the net working capital. Option D calculates the debt ratio. Option E is a nonsensical calculation.

Which of the Following Will Calculate the Current Ratio