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Citrus2011 [14]
3 years ago
8

A company's current assets are $30000 and current liabilities are $19000. Calculate the company's current ratio as a percentage.

Does the company have enough assets to pay its liabilities?
Business
2 answers:
AURORKA [14]3 years ago
7 0

Answer:

Part 1

1.58

Part 2

the company does not have enough assets to pay its liabilities.

Explanation:

Current ratio = Current Assets ÷ Current Liabilities

therefore,

Current ratio =  $30000 ÷ $19000 = 1.58

conclusion

A current ratio of above 2.0 is usually preferred, therefore the company does not have enough assets to pay its liabilities.

drek231 [11]3 years ago
5 0

Answer:

Current Ratio (in %) = 157.89473684211%  rounded off to 157.89%

The current ratio of 157.89% means that the company has 157.89% of current assets to pay off 100% or all of its current liabilities. To understand it better, we can say that to pay off every $1 of current liability, the company has $1.5789 of current assets. Thus, the company has enough current assets to pay off its current liabilities.

Explanation:

The current ratio is a measure of liquidity of a business. It is calculated by dividing the current assets by the current liabilities of the company. To express current ratio in a percentage form, we use the following formula,

Current Ratio (in %) =  [Current Assets / Current Liabilities] * 100

Current Ratio (in %) = [30000 / 19000] * 100

Current Ratio (in %) = 157.89473684211%  rounded off to 157.89%

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