The following information relates to Woolf Unlimited for the past two years. What is the current ratio for the current year?

Question

The following information relates to Woolf Unlimited for the past two years.  What is the current ratio for the current year?

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. From the given information, we can see that the current assets for the current year are $875,000 and the current liabilities are $500,000. Thus, the current ratio for the current year is 1.75 (875,000/500,000). Therefore, the best choice is C.

The Following Information Relates to Woolf Unlimited for the Past