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Carlin Company has current assets of $100,000, total assets of $1,000,000, current liabilities of $50,000, total liabilities of $250,000 and total equity of $750,000. What is the current ratio (rounded to the nearest decimal point)

Answer :

TomShelby

Answer:

current ratio 2

Explanation:

the current ratio stand for the quotient between the current assets and the current liabilities.

it is an easy way to determiante if the company will be able to meet their obligation within the next year

[tex]\frac{current \: assets }{current \: liabilities} \\\\\frac{100,000}{50,000} = $current ratio\\[/tex]

The curent ratio will be equal to 2 Now the company should compare with other firms in the market to check how well is their liquity

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