Use the Following Information to Answer Questions

question 55

Multiple Choice

Use the following information to answer questions
Green Thumb Garden Supplies reported the following information for 2021 and 2022.

-What is the current ratio for 2022?

• A)2.0:1
• B)1.7:1
• C)1.6:1
• D)0.6:1

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Definitions:

Basic Earning Power

An indicator of a company's profitability from operations, expressed as EBIT (Earnings Before Interest and Taxes) divided by total assets.

Total Assets

The sum of all current and non-current assets owned by an entity as reported on the balance sheet.

EBIT

Earnings Before Interest and Taxes; a measure of a firm's profit that includes all expenses except interest and income tax expenses.

Debt/Assets Ratio

A financial ratio that indicates the proportion of a company's assets that are financed by debt.