What Is the Current Ratio If the Short-Term Asset Balance

question 38

Multiple Choice

What is the current ratio if the short-term asset balance is $15,000,000 and the short-term liabilities balance is $500,000?

• A) 33%
• B) 30%
• C) 300%
• D) 1/3

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Definitions:

Shutting Down

The process of ceasing operations or closing a business, often temporarily or permanently, due to various reasons such as financial difficulties or strategic decisions.

Going Out of Business

The process of closing down all operations of a company, often due to financial troubles or bankruptcy.

Fixed Cost

Expenses that do not vary with the level of output or sales, such as rent, salaries, and insurance.

Variable Cost

Costs that vary directly with the level of production or output, such as raw materials and direct labor expenses.