At the end of a recent year, the gap inc. reported total assets of 7,422 million, current assets as 4,309 million, total liabilities of 4,667, current liabilities of 2,128 million, and stockholder's equity of 2,775 million. What is the current ratio and what does this suggest about the company

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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At the end of a recent year, the gap inc. reported total assets of 7,422 million, current assets as 4,309 million, total liabilities of 4,667, current liabilities of 2,128 million, and stockholder's equity of 2,775 million. What is the current ratio and what does this suggest about the company?

a. The ratio of 1.59 suggests that the Gap has liquidity problems
b. The ratio of 2.02 suggests that The Gap has sufficient liquidity
c. The ratio of 1.59 suggests that The Gap has greater current assets than current liabilities
d. The ratio of 2.02 suggests that The Gap is not able to pay its short-term obligations with current assets

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