Question

if a business has $6,000 in current assets and $8,000 in current liabilities, what is its current ratio? 3/4 2 1/2

Explanation:

Step1: Recall the formula for current ratio

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

Step2: Substitute the given values

We are given that current assets = \(\$6,000\) and current liabilities = \(\$8,000\). Substituting these values into the formula, we get \(\text{Current Ratio}=\frac{6000}{8000}\).

Step3: Simplify the fraction

Simplifying \(\frac{6000}{8000}\) by dividing both the numerator and the denominator by 2000, we get \(\frac{6000\div2000}{8000\div2000}=\frac{3}{4}\).

Answer:

3/4