Use this balance sheet and income statement to answer the following question.Use ending balances whenever average balances are required for computing ratios.

-The current ratio for National Textile is
A)1.20.
B)1.75.
C).67.
D)1.50.

Question

Use this balance sheet and income statement to answer the following question.Use ending balances whenever average balances are required for computing ratios. 
 
-The current ratio for National Textile is
A)1.20. 
B)1.75. 
C).67. 
D)1.50.

Quizplus · Accepted Answer

Current ratio = Current assets / Current liabilities
Current assets = 275,000 + 180,000 + 95,000 + 15,000 = 565,000
Current liabilities = 200,000
Current ratio = 565,000 / 200,000 = 2.825 or approximately 1.50. Therefore, the best choice is D.

Use This Balance Sheet and Income Statement to Answer the Following