Question

A firm has net working capital of $2,300 and current assets of $3,500. what is the current ratio?

Answer 1

Based on the net working capital and the current assets, the current ratio of the firm is 2.92

What is the firm's current ratio?

First, find the current liabilities:

= Current assets - Net working capital

= 3,500 - 2,300

= $1,200

The current ratio is:

= Current assets / Current liabilties

= 3,500 / 1,200

= 2.92

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