A firm has total assets of $22,600, fixed assets of $16,800, long-term debt of $

Question

A firm has total assets of $22,600, fixed assets of $16,800, long-term debt of $15,400, and total debt of $21,300. If the inventory is $2,700, what is the current ratio? a. .53 b. .55 c. .58 d. .98 e. 1.02
A firm has total assets of $22,600, fixed assets of $16,800, long-term debt of $15,400, and total debt of $21,300. If the inventory is $2,700, what is the current ratio? a. .53 b. .55 c. .58 d. .98 e. 1.02
A firm has total assets of $22,600, fixed assets of $16,800, long-term debt of $15,400, and total debt of $21,300. If the inventory is $2,700, what is the current ratio? a. .53 b. .55 c. .58 d. .98 e. 1.02 A firm has total assets of $22,600, fixed assets of $16,800, long-term debt of $15,400, and total debt of $21,300. If the inventory is $2,700, what is the current ratio? a. .53 b. .55 c. .58 d. .98 e. 1.02

Explanation / Answer

1) Calculation of Current ratio :

Current ratio = Current assets / Current Liabilities

= (($22,600 - $16,800) / ($21,300 - $15,400))

= $5,800 / $5,900

= 0.98

Answer (D) 0.98

Total assets - Fixed assets = Current Assets

Total debt - Long term debt = Current liabilites

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