Determine the current ratio if current assets total $150,000, non-current assets are $205,000, current liabilities total $60,000, long-term liabilities total $80,000, and shareholder's equity totals $215,000.

Question

Conner Joyce

Business

12 September, 15:56

Determine the current ratio if current assets total $150,000, non-current assets are $205,000, current liabilities total $60,000, long-term liabilities total $80,000, and shareholder's equity totals $215,000.

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Answers (1)

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Junior · Answer 1

The current ratio is 2.5:1

Explanation:

The current ratio is a relationship of the current assets and the current liabilities, and is normally expressed as a percentage.

Based on the data provided in the question, it is calculated as under:

Total Current assets $ 150,000

Total Current Liabilities $ 60,000

The current assets are two and a half times of the current liabilities. Using the lower figure as a base. the current assets are ratio comes out to be

2.5 : 1.