The current ratio is computed by:

Name: The current ratio is computed by:
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Question

Quizplus · Accepted Answer

The current ratio formula requires dividing current assets by current liabilities. This reflects the company's ability to meet its short-term obligations using current assets such as cash or inventory. Option B is incorrect as it uses non-current liabilities instead of current liabilities. Option C reverses the formula, and option D uses non-current assets instead of current assets.

The Current Ratio Is Computed By