Kramer Industries has cash of $39,000; net Accounts Receivable of $45,000; short-term investments of $12,000 and inventory of $31,000. It also has $30,000 in current liabilities and $57,000 in long-term liabilities. What is the current ratio for Kramer Industries?
A) 4.23
B) 3.20
C) 1.90
D) 2.58
A) 4.23
Explanation: current assets (cash, A/R, investments, inventory)/current liabilities; ex: ($39,000 + $45,000 + $12,000 + $31,000)/$30,000 = 4.23
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