Question

if a business has $14,000 in current assets and $7,000 in current liabilities, what is its current ratio? 1 2 3/4

Explanation:

Step1: Recall the formula for current ratio

The formula for current ratio is $\text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}}$.

Step2: Substitute the given values

We are given current assets = $\$14,000$ and current liabilities = $\$7,000$. Substituting these values into the formula, we get $\text{Current Ratio} = \frac{14000}{7000}$.

Step3: Simplify the fraction

Simplifying $\frac{14000}{7000}$, we divide both the numerator and the denominator by 7000, which gives us 2.

Answer:

2