Question : Which of the following is the correct formula for "Current Ratio"?
Option 1: Liquid Assets/Current Liabilities
Option 2: Current Assets/Current Liabilities
Option 3: Fixed Assets/Current Assets
Option 4: Liquid Assets/Current Assets

Question

Question : Which of the following is the correct formula for "Current Ratio"?

Option 1: Liquid Assets/Current Liabilities

Option 2: Current Assets/Current Liabilities

Option 3: Fixed Assets/Current Assets

Option 4: Liquid Assets/Current Assets

Team Careers360 · Accepted Answer

Correct Answer: Current Assets/Current Liabilities

Solution : It is very simple to calculate the current ratio.
Simply divide the current assets by the current liabilities of the company.
Current Assets/Current Liabilities = Current Ratio
Hence option 2 is the correct answer.

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Question : Which of the following is the correct formula for "Current Ratio"?Option 1: Liquid Assets/Current LiabilitiesOption 2: Current Assets/Current LiabilitiesOption 3: Fixed Assets/Current AssetsOption 4: Liquid Assets/Current Assets

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Question : Which of the following is the correct formula for "Current Ratio"?
Option 1: Liquid Assets/Current Liabilities
Option 2: Current Assets/Current Liabilities
Option 3: Fixed Assets/Current Assets
Option 4: Liquid Assets/Current Assets