US CMA Part 2 · Chapter 1 · Question 3 of 15
Brennan Tools Inc. has current assets of $612,000 and current liabilities of $340,000. What is its current ratio?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) 1.80
Explanation
Current ratio = current assets / current liabilities = $612,000 / $340,000 = 1.80 (rounded to two decimals). The reciprocal (0.56) inverts the ratio, while the other figures divide working capital ($272,000) by one side of the balance sheet, which is not the current ratio.
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