Given the following information, calculate the current ratio: Liquid assets = $5,000
Monthly credit payments = $800
Monthly savings = $760
Net worth = $75,000
Current liabilities = $2,000
Take-home pay = $2,300
Gross income = $3,500
Monthly expenses = $2,050

Question

Quizplus · Accepted Answer

Current ratio is defined as the ratio between current assets and current liabilities. To calculate the current ratio, we need to first identify the current assets and liabilities.

Current assets = Liquid assets = $5,000
Current liabilities = $2,000

Current ratio = Current assets / Current liabilities
              = $5,000 / $2,000
              = 2.5

Therefore, the current ratio is 2.5. Option B is the correct answer.

Given the Following Information, Calculate the Current Ratio: Liquid Assets