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19 May, 22:01

Colorado Corporation's financial statements include the following information:

Cash $ 6,100

Net Credit Sales $315,000

Accounts receivable 52,000

Cost of Goods Sold 210,000

Merchandise inventory 92,800

Net Income $ 56,000

Prepaid Expenses 12,600

Total Current Assets $163,500

Total Current Liabilities $ 65,400

Total Stockholders' Equity $200,000

The Current Ratio for Colorado Comapny is:

+3
Answers (1)
  1. 19 May, 23:11
    0
    2.5 times

    Explanation:

    The computation of the current ratio is shown below:

    As we know that

    Current ratio = Total Current assets : total current liabilities

    So by applying the formula, the current ratio is

    = $163,500 : $65,400

    = 2.5 times

    It shows a relationship between the current assets and the current liabilities plus it always expressed in times form
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