Practice Quiz

FINRA Series 7

Category - Series 7

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A large manufacturing company has current assets of approximately $9,400,000 and current liabilities of about $4,900,000. Which of the following statements is true about the current ratio?
  1. it is substantially below the standard minimum
  2. it is somewhat below the standard minimum
  3. it is about the standard minimum
  4. it is somewhat above the standard minimum
Explanation
Answer: B - it is somewhat below the standard minimum. The standard minimum current ratio for a manufacturing company is 2 to 1. The current ratio for this company is 1.92 (9,400,000 divided by 4,900,000).
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