The Current Ratio for a Company with Current Assets of $70,000,current

question 60

Multiple Choice

The current ratio for a company with current assets of $70,000,current liabilities of $50,000,total assets of $150,000,and net sales of $80,000,would be:

• A)1.4.
• B)0.714.
• C)3.0.
• D)0.875.

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Definitions:

Secured Creditor

A lender or creditor who has a legal right to seize collateral if the borrower fails to repay the debt as agreed.

After-Acquired Inventory

Inventory obtained by a company after it has granted a security interest in its inventory to a creditor, which may also fall under the security interest for that creditor.

Financing Statement

A document filed to give public notice of a secured transaction, thereby establishing a lender's security interest in the borrower's collateral.

Avalanche

In finance, an avalanche method refers to a strategy of paying off debts by starting with the highest interest rate debt first.