Business FinancesQuestion 321 of 1605
A contractor has current assets of $120,000 and current liabilities of $80,000. What is the current ratio?
a.1.5
b.0.67
c.2.0
d.40
Explanation
Current ratio = Current Assets ÷ Current Liabilities = $120,000 ÷ $80,000 = 1.5. A ratio of 1.5 means the contractor has $1.50 of current assets for every $1.00 of current liabilities.
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