### Understanding Current RatioA company's classified balance sheet shows current assets of $8,650 and current liabilities of $6,000. What is the company's current ratio?#### Multiple Choice Options:- 3.26 to 1- 1.44 to 1- 0.69 to 1- 1.16 to 1### Explanation:The **current ratio** is a measure of a company's ability to cover its short-term obligations with its short-term assets. It is calculated by dividing the current assets by the current liabilities. Here's how you calculate it based on the given data:- **Current Assets** = $8,650- **Current Liabilities** = $6,000**Current Ratio** = Current Assets / Current Liabilities **Current Ratio** = $8,650 / $6,000 Now, calculate and round to two decimal places to find the most accurate choice from the given options.

The current ratio is a type of liquidity ratio that measures the company's ability to settle the…

Answered: A company's classified balance sheet…

A company's classified balance sheet shows current assets of $8,650 and current liabilities of $6,000. What is the company's current ratio? Multiple Choice 3.26 to 1 1.44 to 1 0.69 to 1 1.16 to 1

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Total Total Owner's Debt-to- Debt-to- Company Assets Liabilities Equity Assets Ratio Equity Ratio an…

A: Total assets= $242,430 Total liabilities= $114,320

Q: A company has total equity of $2,085, net working capital of $215, long-term debt of $1,020, and…

A: Net Fixed Assets - It is the value of fixed assets derived after deducting accumulated depreciation…

Q: Accounting A company has total assets of $500,000, total liabilities of $200,000, and total equity…

A: The objective of the question is to calculate the company's debt-to-equity ratio. The debt-to-equity…

Q: Rosewood Company had current assets of $612, current liabilities of $393, total assets of $722, and…

A: Debt ratio: It implies to the ability of the business in repaying its liabilities or debt…

Q: The balance sheet data of Randolph Company for two recent years appears below: Assets: Year 2…

A: Financial analysis is widely used by companies to determine the profitability of the business and…

Q: Prepare a vertical analysis of the balance sheets for Year 4 and Year 3. (Percentages may not add…

A: The vertical analysis compares the results of two different years. The income statement is analyzed…

Q: Knowledge Check Data from the comparative balance sheets of Wise Company are presented here. Perform…

A: For vertical analysis, each element of the financial statement is compared on the basis of the base…

Q: Determining the effects of business transactions on selected ratios Financial statement data of…

A: Hey, since there are multiple sub-parts posted, we will answer the three sub-parts. If you want any…

Q: FIN ANCIAL RATIO S Based on the financial statements for Jackson Enterprises (income statement,…

A: Since we answer only three subparts, we will answer the first three. Please resubmit the question…

Q: 1. A company has Currents Assets of 175,000 and Current Liabilities of 120,000. Calculate the…

A: Current ratio is computed by dividing the current assets with the current liabilities. Current ratio…

Q: Belnap Company has provided the following partial comparative balance sheets and the income…

A: Definition: Statement of cash flows: This statement reports all the cash transactions which are…

Q: Revenues RUNDLE COMPANY Horizontal Analysis of Income Statements Year 4 Year 3 Sales (net) Other…

A: The horizontal analysis is compared to change in amount of different financial periods. It is…

Q: omplete Computer Services reports Total Assets of $1,000, Total Liabilities of $200, and Total…

A: The ratio analysis is performed to compare the different elements of the business. The debt ratio is…

Q: If a company has current assets of $15,000 and current liabilities of $9,375, its current ratio is…

A: Current ratio is the ratio between total current assets and total current liabilities. It is…

Q: A company reports the following income statement and balance sheet information for the current year:…

A: The return on total assets is the used by the company to measure the earning capability in…

Q: Required Prepare a vertical analysis of both the balance sheets and income statements for Year 4 and…

A: The vertical analysis is performed to compare the element of balance sheet with respect to total…

Q: 1) The Ivy Corporation shows the following data: Current assets:…

A: Current Ratio: It is the measuring tool that is used to measure company's liquidity. It establishes…

Q: What is the percentage of Total Liabilities in Total Assets if a firm has 2, 233, 000 in…

A: ACCOUNTING EQUATIONAccounting Equation is a Financial Accounting Technique which represents the…

Q: Calculate the following ratios, follow the steps and must interpret your answers , Current ratio…

A: 1) Current Ratio = Current Assets / Current Liabilities

Q: EX.17-179.ALGO The following information was from Slater Company's balance sheet: Fixed assets (net)…

A: Ratio of fixed assets to long-term liabilities = Fixed assets/Long term liabilitiesRatio of…

Q: assets consisted of $63,800 Cash; $45,700 Accounts Receivable; and $74,500 of Inventory. The…

A: Acid Test ratio = Quick Assets/ Current liabilities Acid test ratio = $ 109,500/ $ 127,500 Acid test…

Q: Formulating Financial Statements from Raw Data and Calculating Ratios Following is selected…

A: Since you have posted a question with multiple sub-parts, we will do the first three sub-parts for…

Q: Compute the missing amounts on the company’s financial statements. (Hint: What’s the difference…

A: Retained Earnings - Retained earnings are the total amount of a company's profits that are set aside…

Q: please step by step solution.

A: Step 1: Given:Net income =$390,000Interest expense =$60,000Average Total assets =$4,500,000Step 2:…

Question

100%

### Understanding Current Ratio

A company's classified balance sheet shows current assets of $8,650 and current liabilities of $6,000. What is the company's current ratio?

#### Multiple Choice Options:

- 3.26 to 1
- 1.44 to 1
- 0.69 to 1
- 1.16 to 1

### Explanation:

The **current ratio** is a measure of a company's ability to cover its short-term obligations with its short-term assets. It is calculated by dividing the current assets by the current liabilities. Here's how you calculate it based on the given data:

- **Current Assets** = $8,650
- **Current Liabilities** = $6,000

**Current Ratio** = Current Assets / Current Liabilities
**Current Ratio** = $8,650 / $6,000

Now, calculate and round to two decimal places to find the most accurate choice from the given options.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2 - Calculation of company's current ratio.

VIEW

Step 3 - Answer

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

What is the current assets for each company? What are the short term investments for each company? What is the average account receivable for each company? What is the average inventory for each company?
stark company most recent balance sheet reported total assets of 2.02 million and total liabilitie of 0.74 million and total equity of 1.28 million its debit equity to ratio is A. 0.37 B. 0.63 C. 1.73 D. 0.58 E. 1.00
A company had total assets of $39,946 and total liabilities of $30,624. Calculate its debt ratio. Be sure to show work
The following information was taken from Station Company's balance sheet: Line Item Description Amount Fixed assets (net) $940,800 Long-term liabilities 192,000 Total liabilities 1,209,600 Total stockholders' equity 672,000 Determine the company's (a) ratio of fixed assets to long-term liabilities and (b) ratio of liabilities to stockholders' equity. If required, round your answers to one decimal place. Line Item Description Ratio a. Ratio of fixed assets to long-term liabilities fill in the blank 1 b. Ratio of liabilities to stockholders' equity
Required Prepare a vertical analysis of both the balance sheets and income statements for Year 4 and Year 3. Complete this question by entering your answers in the tabs below. Analysis Bal Sheet Analysis Inc Stmt Prepare a vertical analysis of an income statements for Year 4 and Year 3. (Percentages may not add exactly due to rounding. Round your answers to 2 decimal places. (i.e., .2345 should be entered as 23.45).) ALLENDALE COMPANY Vertical Analysis of Income Statements Year 4 Year 3 Amount % Total Amount % Total Revenues Sales (net) $ 230,000 100.00 % $ 210,000 100.00 % Other revenues 8,000 5,000 Total revenues 238,000 215,000 Expenses Cost of goods sold 120,000 103,000 Selling, general, and administrative expense 55,000 50,000 Interest expense 8,000 7,200 Income tax expense 23,000 22,000 Total expenses 206,000 182,200 Net income $ 32,000 % $ 32,800 %
Using the following selected items from the comparative balance sheet of Oriole Products.Determine the horizontal analysis. (Round percentages to 2 decimal places, e.g. 12.21%. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) ORIOLEPRODUCTSComparative Balance SheetDecember 31 2014 2013 Horizontal analysis Amount Percentage Amount Percentage Current assets $110,880 enter percentages % $128,216 enter percentages % Long-term assets 174,240 enter percentages % 117,304 enter percentages % Total assets 3,168,000 enter percentages % 2,728,000 enter percentages % Determine the vertical analysis. (Round percentages to 1 decimal place, e.g. 12.2%.) ORIOLEPRODUCTSComparative Balance SheetDecember 31 2014 2013 Vertical analysis Amount Percentage Amount Percentage Current assets $110,880…
Subject: acounting
You are required to calculate:1. Liquidity ratios 2. Solvency rations 3. Profitability ratios For the selected companies and shortly write your comments and findings.