Final answer:
To calculate the current ratio for Bathez Corp., the total current assets ($500,064) were divided by the current liabilities (accounts payables of $353,786), resulting in a current ratio of 1.41 when rounded to two decimal places.
Step-by-step explanation:
The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year. It is calculated by dividing a company's current assets by its current liabilities. For Bathez Corp., the current assets include receivables, inventory, and cash, while the current liabilities include accounts payables.
To calculate the current ratio for Bathez Corp., we add the receivables of $91,304, the inventory of $385,889, and the cash of $22,871 to get the total current assets.
Total current assets = Receivables + Inventory + Cash
Total current assets = $91,304 + $385,889 + $22,871
Total current assets = $500,064
Next, we take the total current assets and divide them by the accounts payables, which are the firm's current liabilities.
Current ratio = Total current assets / Accounts payables
Current ratio = $500,064 / $353,786
Current ratio = 1.41 (rounded to two decimal places)
Hence, the firm's current ratio is 1.41, which indicates that for every dollar of liability, the firm has $1.41 in assets to cover it.