Home › US CMA Part 2 › Finance › Financial Ratio Analysis › A company with current assets of 500 and current…
A company with current assets of 500 and current liabilities of 250 has a current ratio of:
AIt is half to one
BIt is two fifty
CIt is seven fifty
DIt is two to one
Answer & Solution
Correct answer: D. It is two to one
1. The current ratio is a straightforward division.
2. The current ratio represents the current assets divided by current liabilities.
3. Here current assets are 500 and current liabilities are 250.
4. Dividing 500 by 250 gives 2.
5. So the current ratio is two.
_Source: OpenStax Principles of Finance (CC BY 4.0), Ch 6 'Measures of Financial Health'_
Related questions
Comparing a firm's ratios against rivals in the same sector uses which stated purpose of rA current ratio below one means current liabilities exceed:Inventory turnover and days' sales in inventory both belong to which ratio family?A firm that can pay next month's bills but not its ten-year debt is strong in which respecRatio analysis is also described as being used to compare industry:Alongside examining trends, ratio analysis can establish benchmarks for:Ratio analysis information can be used to examine trends in:Which areas of efficiency are described as important?