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14 November, 04:43

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

+1
Answers (1)
  1. 14 November, 04:47
    0
    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
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