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Calculate the current ratios for the following: a) current assets: $700,000; current liability: $350,000 b) current...

Calculate the current ratios for the following:

a) current assets: $700,000; current liability: $350,000

b) current assets: $300,000; current liability:
$200,000

c) current assets: $500,000; current liability: $250,000
business   accounting   
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Answer #1

(a). Current ratio = 2 : 1

Explanation;

Current ratio = Current assets / Current liabilities

Current ratio = $700,000 / $350,000

= 2 : 1

(b). Current ratio = 1.50 : 1

Explanation;

Current ratio = Current assets / Current liabilities

Current ratio = $300,000 / $200,000

= 1.50 : 1

(c). Current ratio = 2 : 1

Explanation;

Current ratio = Current assets / Current liabilities

Current ratio = $500,000 / $250,000

= 2 : 1

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