Calculate the current ratio and the acid-test ratio. Is the company healthy based on the guidelines given in the text?Current assets: $407,000Current liabilities: $189,000Liquid assets: $149,000
A. Current ratio = 0.79 which is too low
Acid-test ratio = 2.15 which is fine
B. Current ratio = 2.73 which is fine
Acid-test ratio = 0.79 which is too low
C. Current ratio = 2.15 which is fine
Acid-test ratio = 2.73 which is fine
D. Current ratio = 2.15 which is fine
Acid-test ratio = 0.79 which is too low
Answer: D
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A. ? =
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D. ? =
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