Selected data for the Rubio Company follow: Based on these facts, what are Rubios current ratio and
Question:
Selected data for the Rubio Company follow:
Based on these facts, what are Rubio’s current ratio and debt ratio?
Current ratio .............. Debt ratio
a. 1.200 ............................. 0.629
b. 1.590 ............................. 0.629
c. 8.315 .............................. 0.833
d. 1.244 ............................. 0.236
Current liabilities Long-term liabilities. Total expenses.. .. $ 26,000 Current assets... $ 31,200 Long-term assets .... 185,000 199,000 110,000 160,000 .... Total revenues..........
Step by Step Answer:
a Current ratio ...View the full answer
Financial Accounting
ISBN: 978-0134725987
12th edition
Authors: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Related Video
The current ratio is a financial ratio that measures a company\'s ability to pay its short-term obligations with its short-term assets. It is calculated by dividing a company\'s current assets by its current liabilities. The formula for calculating the current ratio is: Current Ratio = Current Assets / Current Liabilities Current assets are assets that can be converted to cash within one year, while current liabilities are debts that are due within one year. A current ratio of 1:1 or greater is generally considered good, as it indicates that a company has enough current assets to cover its current liabilities. A current ratio of less than 1:1 may suggest that a company may have difficulty meeting its short-term obligations. It\'s important to note that the current ratio is just one of many financial ratios that can be used to assess a company\'s financial health. It should be used in conjunction with other financial ratios and qualitative factors to make informed decisions about investing or lending to a company.
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