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W. O’Brien Ltd is examining its liquidity - Leaving Cert Business - Question 11 - 2019

Question 11

W. O’Brien Ltd is examining its liquidity. From the information below, calculate the Current Ratio. (Show formula and workings.) Current Assets €150,000 Current Lia... show full transcript

Worked Solution & Example Answer:W. O’Brien Ltd is examining its liquidity - Leaving Cert Business - Question 11 - 2019

Step 1

Formula:

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Answer

The Current Ratio is calculated using the formula:

$\text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}}$

Step 2

Workings:

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Answer

Substituting the values from the information provided:

$\text{Current Ratio} = \frac{150,000}{75,000}$

Step 3

Answer:

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Answer

Calculating the ratio gives us:

$\text{Current Ratio} = 2 : 1$

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