Question

If current assets are $112,000 and current liabilities are $56,000, what is the current ratio?

a. 2.0
b. 200 percent
c. 50 percent
d. $50,000

Answer 1

The current ratio is calculated by dividing current assets by current liabilities. In this case, the current ratio is 2.0.

Step-by-step explanation:

The current ratio is a financial ratio that measures a company's ability to pay its short-term liabilities with its short-term assets. It is calculated by dividing current assets by current liabilities.

In this case, the current assets are $112,000 and the current liabilities are $56,000. So, the current ratio is:

Current Ratio = Current Assets / Current Liabilities

Current Ratio = $112,000 / $56,000 = 2.0

Therefore, the correct answer is a. 2.0.