Question

Assume current assets = 11,300; long-term liabilities = 45,000; and total debt - 54,800. What is the current ratio?

A) 0.21
B) 0.48
C) 0.29
D) 0.41

Answer 1

The current ratio cannot be accurately calculated using the provided information since the current liabilities figure is missing. Typically, the current ratio is current assets divided by current liabilities.

Step-by-step explanation:

The student asked for the current ratio given that current assets are $11,300 and total debt is $54,800. To calculate the current ratio, we divide the current assets by the current liabilities. However, we only have the figure for total debt, which includes both current and long-term liabilities. Since we are not provided with current liabilities specifically, we cannot calculate an accurate current ratio. Typically, the current ratio is calculated as follows: Current Ratio = Current Assets / Current Liabilities. In a case where we would have the current liabilities, we would use them to determine the ratio.