Valdez Corporation has cash of $153,000; net Accounts Receivable of $93,000; short-term investments of $35,000 and prepaid expenses of $43,000. It also has $45,000 in current liabilities and $76,000 in long-term liabilities. What is the current ratio for Valdez Corporation?
A) 3.40
B) 7.20
C) 6.24
D) 2.68
B) 7.20
Explanation: current assets (cash, A/R, investments, inventory)/current liabilities; ex: ($153,000 + $93,000 + $35,000 + $43,000)/$45,000 = 7.20
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