As the accountant for Franks 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.

Current ratio = Current assets / Current liabilities

Current assets = $120,000 
Current liabilities = $80,000

Current ratio = $120,000 / $80,000 = 1.5

Therefore, the firm's current ratio is 1.5, which is closest to option B.

As the Accountant for Franks Retail Stores,you Must Calculate the Current