The following balance sheet Information is provided for Duke Company for Year 2:AssetsCashAccounts receivableInventoryPrepaid expensesPlant and equipment, net of depreciationLandTotal assetsLiabilities and Stockholders' EquityAccounts payableSalaries payableBonds payable (due in ten years)Common stock, no parRetained earningsTotal liabilities and stockholders' equityWhat is the company's current ratio?Note: Round your answer to 2 decimal places.Multiple ChoiceOOOO1.163.792.531.31$ 5,40015,50018,0001,60020,20019,950$ 80,650$ 4,50011,50019,00030,00015,650$ 80,650< Prev11 of 35MacBook AirNext >

The objective of this question is to calculate the current ratio of Duke Company. The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year. It is calculated by dividing current assets by current liabilities.First, we need to identify the current assets and current liabilities from the balance sheet. Current assets are those assets that can be converted into cash within one year and typically include cash, accounts receivable, inventory, and prepaid expenses. In this case, the current assets are Cash ($5,400), Accounts Receivable ($15,500), Inventory ($18,000), and Prepaid Expenses ($1,600). Adding these up, we get a total current assets of $40,500.Current liabilities are the company's debts or obligations that are due within one year and typically include accounts payable, salaries payable, and other short-term debts. In this case, the current liabilities are Accounts Payable ($4,500) and Salaries Payable ($11,500). Adding these up, we get a total current liabilities of $16,000.Now, we can calculate the current ratio by dividing the total current assets by the total current liabilities. So, the current ratio is $40,500 / $16,000 = 2.53 (rounded to two decimal places).The current ratio of Duke Company is 2.53. This means that the company has 2.53 times more current assets than current liabilities, indicating a good short-term financial strength.