Question:

Help for math?! How do you calculate the current ratio?

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Long-term assets are $800, current liabilities are $500, and long-term liabilities are $600. If the current ratio is 2.5 to 1, then current assets are?

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  1. If the current ration of 2.5:1 is current assets:current liabilities, then:

    2.5/1 = x/500

    Where x = current assets.

    x = 2.5(500)

    x = 1250


  2. just multiply 2.5 in assets and liabilities and thats it.

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