Question

Wilberton's has total assets of $537,800, net fixed assets of $412,400, long-term debt of $323,900, and total debt of $388,700. If inventory is $173,900, what is the current ratio?

Answer 1

Answer:

Current Ratio=1.93518

Explanation:

$Current\ Ratio=\frac{Current\ Assets}{Current\ Liabilities}$

Calculating Current Assets:

Current Assets=Total assets-Net fixed assets

Current Assets=$537,800- $412,400

Current Assets=$125,400

Current Liabilities=Total debt- Long-term debt

Current Liabilities=$388,700- $323,900

Current Liabilities=$64,800

Current Ratio=$\frac{\ 125,400}{\ 64,800}$

Current Ratio=1.93518