Please Refer to Table 4-2 for the Following Questions

question 35

Multiple Choice

Please refer to Table 4-2 for the following questions.
Table 4-2
Drummond Company
Balance Sheet

-Based on the information in Table 4-2,the current ratio is

• A) 2.97.
• B) 2.46.
• C) 2.35.
• D) 2.23.

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Definitions:

Cash Reserves

Funds that a company or individual keeps on hand to meet short-term and emergency funding needs.

Inventory Turnover

A calculation representing the turnover rate of a company's stock, showing how often it's sold and replaced within a given period.

Current Ratio

A liquidity measure that evaluates a company's ability to pay short-term obligations or those due within one year, calculated by dividing current assets by current liabilities.

Fixed Asset Turnover

A financial ratio that measures a company’s ability to generate sales from its fixed-asset investments - such as property, plant, and equipment.