Question

question 6 (10 points)
what is the current ratio given the following information?
current assets = $477.50
inventory = $275
current liabilities = $1075

• 0.70
• 0.45
• 0.33
• 0.60

question 7 (10 points)
what is the current ratio given the following information?
current assets = $750
inventory = $275
current liabilities = $1075

• 0.81
• 0.70
• 0.95
• 0.65

Explanation:

Calculate the Current Ratio for Question 6

$$ \text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}} = \frac{477.50}{1075} \approx 0.4442 \approx 0.45 $$

Calculate the Current Ratio for Question 7

$$ \text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}} = \frac{750}{1075} \approx 0.6977 \approx 0.70 $$

Answer:

Question 6

• (A) 0.70
• (B) 0.45 (Correct answer)
• (C) 0.33
• (D) 0.60

Question 7

• (A) 0.81
• (B) 0.70 (Correct answer)
• (C) 0.95
• (D) 0.65