Calculate the current ratio and the acid-test ratio. Is the company healthy based on the guidelines given in the text?Current assets: $1,404,000Current liabilities: $673,000Liquid assets: $879,000
A. Current ratio = 2.09 which is fine
Acid-test ratio = 1.31 which is fine
B. Current ratio = 1.31 which is too low
Acid-test ratio = 2.09 which is fine
C. Current ratio = 1.60 which is low
Acid-test ratio = 1.31 which is fine
D. Current ratio = 2.09 which is fine
Acid-test ratio = 1.60 which is fine
Answer: A
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