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
Answer (1)
25th Jan, 2024
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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