A retailer has $100,000 in cash,$300,000 in accounts receivable,$500,000 in inventory,$200,000 in marketable securities,and $800,000 in total current liabilities.What is its current ratio?

Question

Quizplus · Accepted Answer

The current ratio is calculated by dividing total current assets by total current liabilities. The retailer's current assets are $100,000 (cash) + $300,000 (accounts receivable) + $500,000 (inventory) + $200,000 (marketable securities) = $1,100,000. The current liabilities are $800,000. Thus, the current ratio is $1,100,000 / $800,000 = 1.375.

A Retailer Has $100,000 in Cash,$300,000 in Accounts Receivable,$500,000 in Inventory,$200,000