Question

what is the current ratio for fictitious business corporation? (round answer to nearest hundredth.) 2.58 0.89 0.4

Explanation:

The current ratio is calculated as current assets divided by current liabilities. Typically, a reasonable current ratio for a business is often above 1 (though it varies by industry). Among the options, 2.58 is a more typical current ratio value compared to 0.89 (which is slightly below 1, indicating potential short - term liquidity issues in many cases) and 0.4 (which is very low and would suggest significant short - term liquidity problems). So 2.58 is the most probable current ratio for a business corporation.

Answer:

A. 2.58