The MediaX Company Has Current Assets of $565,000 and Current

question 158

Multiple Choice

The MediaX company has current assets of $565,000 and current liabilities of $342,000 (565,000/343,000 = 1.65) . What does this current ratio mean?

• A) MediaX has 65 percent more current liabilities than current assets.
• B) MediaX has 165 percent more current liabilities than current assets.
• C) MediaX has 65 percent more current assets than current liabilities.
• D) MediaX has 165 percent more current assets than current liabilities.

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Definitions:

Note Payable

A written promise to pay a specified amount of money, typically with interest, at a future date or dates.

Fiscal Year

A one-year period that companies and governments use for financial reporting and budgeting, which may not coincide with the calendar year.

Quick Ratio

A liquidity measure that evaluates a company's ability to cover its current liabilities with its most liquid assets, excluding inventory.

Current Liabilities

Short-term financial obligations that are due within one year or within the normal operating cycle of the business.