A firm has long-term assets worth 3,812 and total assets worth 5,937. It has a total equity of 3,934 and long term debt of 879. The firm's current ratio equals
________.
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A. B. C. D.D
The firm's current assets equal 5,937 - 3,812 = 2,125. The total liabilities equal total assets - total equity = 5,937 - 3,934 = 2,003. Thus, the current liabilities equal
2,003 - 879 = 1,124. The current ratio is then equal to current assets/current liabilities = 2125/1124 = 1.89