What is the Current Ratio given the following information?

Current Assets = $750

Inventory = $275

Current Liabilities = $1075

Question 7 options:

0.81

0.70 incorrect

0.95

0.65

0.95

Explanation:

The current ratio is a liquidity ratio that measures a business's ability to meet its short-term obligation. It indicates a company's financial strength by evaluating its ability to meet current assets using current liabilities.

The formula for calculating the current ratio is current assets / current liabilities.

In this case: Current assets + inventory

$750 + $275 = $ 1,025

Liabilities : $ 1075

Current ratio: $1,025/$1,075

=0.95