Quicksilver Co. has cash of $35,000; net Accounts Receivable of $43,000; short-term investments of $23,000 and inventory of $30,000. It also has $28,000 in current liabilities and $54,000 in long-term liabilities. The current ratio for Quicksilver is:

Question

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. Quicksilver's current assets are $35,000 + $43,000 + $23,000 + $30,000 = $131,000. Its current liabilities are $28,000. Therefore, its current ratio is $131,000 / $28,000 = 4.68.