If a firm has a current ratio of 2.5,it means that for every $2.50 in _____ it has $1.00 in
A)current assets; current liabilities
B)total assets; total liabilities
C)current assets; total liabilities
D)total assets; current liabilities

Question

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities, indicating the firm's ability to pay off its short-term liabilities with its short-term assets.

If a Firm Has a Current Ratio of 2