Practice - Current Ratio Formula
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Practice Questions
Test your understanding with targeted questions
What is the formula for calculating the Current Ratio?
💡 Hint: Think about the two parts of the company's balance sheet.
If a company has $400,000 in current assets and $200,000 in current liabilities, what is its Current Ratio?
💡 Hint: Use the formula and plug in the given numbers.
4 more questions available
Interactive Quizzes
Quick quizzes to reinforce your learning
What is the formula for the Current Ratio?
💡 Hint: Recall the structure of the definition.
True or False: A Current Ratio below 1 indicates a company can easily cover its short-term obligations.
💡 Hint: Consider what the ratio indicates about assets versus liabilities.
1 more question available
Challenge Problems
Push your limits with advanced challenges
A tech startup has current assets of $1,200,000 and current liabilities of $800,000. Evaluate the startup's liquidity situation and discuss possible implications for future investment.
💡 Hint: Think about the implications of having a strong ratio in terms of attracting investors.
If a company consistently reports a Current Ratio below 1.2 despite growth in revenue, what should management consider to improve liquidity?
💡 Hint: Focus on operational strategies that can directly impact liquidity.
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