Question

Based on the following information from Scranton Company's balance sheet, calculate the current ratio.

Current assets $87,000
Investments 50,000
Plant assets 220,000
Current liabilities 39,000
Long-term liabilities 90,000
Retained earnings 228,000

Answer 1

2.23

Step-by-step explanation:

Calculation to determine the current ratio

Using this formula

Current Ratio = Current Assets / Current Liabilities

Where,

Current Assets = $87,000

Current Liabilities = $39,000

Let plug in the formula

Current Ratio = $87,000 / $39,000

Current Ratio = 2.23

Therefore Current Ratio is 2.23