The Formula for Computing the Current Ratio Is ________

question 156

Multiple Choice

The formula for computing the current ratio is ________.

• A)Current ratio = Current assets / Total assets
• B)Current ratio = Current assets / Total liabilities
• C)Current ratio = Current assets / Stockholders' Equity
• D)Current ratio = Current assets / Current liabilities

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Definitions:

Direct Materials

Raw materials that are directly traced and integrated into a finished product and significantly contribute to its production cost.

Medical Supplies

Medical supplies encompass a wide range of products used in healthcare settings, including surgical instruments, diagnostic devices, and items used for patient care.

Administrative Expenses

Expenses that are not directly tied to a specific business activity but are necessary for the overall operation of a company; these may include salaries of administrative personnel, rent, and utilities.

Net Operating Income

A company's total income from operations, excluding expenses and taxes.