Question

Using the following balance sheet and income statement data, what is the current ratio? Current assets $ 32,000 Net income $ 42,000 Current liabilities 16,000 Stockholders' equity 78,000 Average assets 160,000 Total liabilities 42,000 Total assets 120,000 Average common shares outstanding was 15,000.

Answer 1

2 times

Step-by-step explanation:

Current ratio is computed by dividing the total assets by the total liabilities

Current ratio = Current assets / Current liabilities

Current assets = $32,000

Current liabilities = $16,000

Current ratio = $32,000 / $16,000

Current ratio = 2 times