A partial balance sheet ($s in thousands) for Captain D\'s Sportswear is shown b

Question

A partial balance sheet ($s in thousands) for Captain D's Sportswear is shown below. Assets: Liabilities: Cash $67 Accounts payable $244 Accounts receivable (net) 177 Other liabilities 90 Investments 54 Total current liabilities 334 Inventory 203 Long-term liabilities 119 Prepaid rent 27 Total liabilities 453 Total current assets 528 Stockholders' equity: Property & Equipment (net) 265 Common stock 159 Retained earnings 181 Total stockholders’ equity 340 Total assets $793 Total liabilities and equity $793 The current ratio is:

Explanation / Answer

Current ratio = Total current assets / Total current liabilties

= $528 / $334

= 1.581

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