As the accountant for Marston Retail Stores, you must calculate the current ratio for the firm's last accounting period. The firm's current assets were $120,000, its fixed assets were $240,000, its current liabilities were $80,000, and its long-term liabilities were $60,000. Given these facts, what is the firm's current ratio?
A) 1
B) 1.5
C) 2
D) 3
E) 4

Question

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. Therefore, the current ratio for Marston Retail Stores is $120,000 / $80,000 = 1.5.

As the Accountant for Marston Retail Stores, You Must Calculate