A firm has $10 million in cash,$4.5 million in accounts receivable,and inventory of $8 million.The firm's accounts payable is $6.2 million and the firm has no short-term debt.What is the firm's current ratio?
A)3.63
B)1.05
C)5.38
D)2.90
E)2.34

Question

Quizplus · Accepted Answer

Current ratio = (Current assets) / (Current liabilities)
Current assets = Cash + Accounts receivable + Inventory = $10m + $4.5m + $8m = $22.5m
Current liabilities = Accounts payable = $6.2m
Current ratio = $22.5m / $6.2m = 3.63

A Firm Has $10 Million in Cash,$4