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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

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BuyFindarrow_forward

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Twenty metrics of liquidity, solvency, and profitability

The comparative financial statements of Automotive Solutions Inc. are as follows. The market price of Automotive Solutions Inc. common stock was $119.70 on December 31, 20Y8


Instructions

Current ratio

To determine

Concept Introduction:

Current Ratio:

Current Ratio is the measure of the company's ability to pay off its current liabilities using its current assets. It is calculated by dividing the total current assets by the total current liabilities. The formula of the current ratio is as follows:

  Current Ratio=Current assetsCurrent liabilities

To Calculate:

The Current Ratio.

Explanation

The Current Ratio is calculated as follows:

    20Y8 20Y7
    Total Current Assets (A) $ 3,690,000 $ 3,089,000
    ...

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