Which of the Following Is the Formula to Compute the Current

question 69

Multiple Choice

Which of the following is the formula to compute the current ratio?

• A)(Cash + short-term investments + net current liabilities)/current liabilities
• B)(Current liabilities +short-term investments + net current receivables)divided by current assets
• C)Current assets/current liabilities
• D)Current liabilities/current assets

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Definitions:

Economic Profit

Profit that accounts for both explicit costs and opportunity costs.

Economic Profit

The financial gain made in a transaction after subtracting both the explicit and implicit costs.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Variable Costs

Costs that change in proportion to the level of output or activity in a business.