Question

if a business has $6,000 in current assets and $8,000 in current liabilities, what is its current ratio? 2 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 know 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 (or 0.75, but the option is 3/4)