The Current (Working Capital) Ratio Is Calculated by Dividing

question 54

Multiple Choice

The current (working capital) ratio is calculated by dividing:

• A) profit by current assets.
• B) revenue by current assets.
• C) current liabilities by current assets.
• D) current assets by current liabilities.

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Definitions:

Capital Balance

The amount of money that stakeholders have invested in a company, often shown in the equity section of a balance sheet.

Income Distribution

This refers to the way money is allocated among individuals or groups in an economy, indicating how wages, salaries, and profits are divided.

Capital Contributions

Monetary or other assets provided by owners or shareholders to increase a company's equity.

Capital Balance

Capital balance refers to the amount of funds contributed by investors or owners, plus retained earnings or minus losses.