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Current Ratio

The formula u...

Question

The formula used to calculate the current ratio is _______________ _ .

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Solution

(A) Current liabilities / Current assets

(B) Current assets / Current liabilities

(C) Inventory / Current liabilities

(D) Current liabilities / Inventory

Answer (B): current assets / current liabilities.

Explanation: The formula used to calculate the current ratio is Current assets / Current liabilities.

Also see: Difference Between Current Ratio and Quick Ratio

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