Final answer:
The current ratio of Duke Company is 0.43, indicating potential challenges in meeting short-term obligations.
Step-by-step explanation:
The current ratio is a financial ratio that measures a company's ability to pay its short-term liabilities using its short-term assets. It is calculated by dividing the company's current assets by its current liabilities.
In this case, the company's current assets consist of reserves of $30, bonds of $50, and loans of $50, totaling $130. The company's current liabilities consist of deposits of $300. Therefore, the current ratio is calculated as $130 divided by $300, which equals 0.43.
The current ratio indicates the company's liquidity and ability to meet its short-term obligations. A ratio below 1 suggests that the company may encounter difficulty in paying its current liabilities. In this case, the current ratio of 0.43 indicates that Duke Company may face challenges in meeting its short-term obligations.