The current ratio given the current assets and the current liabilitites for Teri's Photography is 0.52.
Current ratio is a liquidity ratio. Liquidity ratios measure a firm's ability to meet its short terms obligations.
Current ratio = current asset /current liability
Current ratio = (total assets - fixed assets) / (total liabilities - long term debt)
= (50,800 - 47400) / (42900 - 36300) =
3400 / 6600 = 0.52
In order to determine the current ratio, divide the current assets by the current liabilities.
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