Question

The Casinova Corp. has provided the following account balances:

Cash $76,000;

Short-term investments $8,000;

Accounts receivable $96,000;

Supplies $12,000;

Long-term notes receivable $4,000;

Equipment $192,000;

Factory Building $360,000;

Intangible assets $12,000;

Accounts payable $90,000;

Accrued liabilities payable $12,000;

Short-term notes payable $42,000;

Long-term notes payable $184,000.

What is Casinova's current ratio?

Answer 1

Answer)

Calculation of current ratio

Current ratio = Current Assets/ Current Liabilities

                        = $ 192,000/ $ 144,000

                        = 1.33 times

Therefore current ratio of the company is 1.33 times

Working Note:

Calculation of Current Assets:

Current Assets	Amount (In $)
Cash	76,000
Short term investments	8,000
Accounts receivable	96,000
Supplies	12,000
Total	192,000

Calculation of Current Liabilities:

Current Liabilities	Amount (In $)
Accounts Payable	90,000
Accrued Liabilities Payable	12,000
Short-term notes Payable	42,000
Total	144,000