The following information is taken from the balance sheet of Atlanta Company:
Atlanta Company's current ratio is:

A)2.5 to 1
B)1.6 to 1
C)1.76 to 1
D).66 to 1

Question

The following information is taken from the balance sheet of Atlanta Company:
Atlanta Company's current ratio is:

A)2.5 to 1 
B)1.6 to 1 
C)1.76 to 1 
D).66 to 1

Quizplus · Accepted Answer

Current ratio= current assets/ current liabilities
=(420,000+180,000+60,000)/ (320,000+120,000)
= $660,000/$440,000
= 1.5:1
Therefore, the current ratio of Atlanta Company is 1.5 to 1. The best choice is B, 1.6 to 1, as it is the closest to 1.5 to 1.

The Following Information Is Taken from the Balance Sheet of Atlanta