A company has cash of $215,000; short-term investments of $35,000; net receivables of $75,000; and inventory of $150,000.Current liabilities total $90,000.The current ratio is:

Question

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. In this case, current assets are $215,000 + $35,000 + $75,000 + $150,000 = $475,000. Current liabilities are $90,000. Therefore, the current ratio is $475,000 / $90,000 = 5.28:1.

A Company Has Cash of $215,000; Short-Term Investments of $35,000;