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13 June, 14:19

If current assets amount to $120,000, total assets are $600,000, current liabilities are $60,000, long term debt is $340,000 and total liabilities are $400,000, what is the current ratio?

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  1. 13 June, 14:33
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    Explanation:

    Current ration is a financial measure used to measure how many times a company's current assets can be used to meet its current obligation

    Current ratio = current asset/current liabilities

    Current assets = $120,000

    Current liabilities = $400,000 - $340,000

    = $60,000

    Current ratio = $120,000/$60,000 = 2 times
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