Current assets are $40,000 and long-term assets are $50,000. Total liabilities are $60,000, of which current liabilities are 50%. The current ratio is:

Question

Quizplus · Accepted Answer

The current ratio is calculated as current assets divided by current liabilities. Current liabilities are 50% of total liabilities, which is $60,000, so current liabilities are $30,000. The current ratio is $40,000 / $30,000 = 1.33.

Current Assets Are $40,000 and Long-Term Assets Are $50,000