The current ratio is calculated as

Multiple choice — select the best answer

ACash divided by current liabilities
BCurrent liabilities divided by current assets
CTotal assets divided by total liabilities
DCurrent assets divided by current liabilities

✓ Correct answer: D. Current assets divided by current liabilities The current ratio is a liquidity measure calculated by dividing current assets by current liabilities. It indicates the company's ability to pay short-term obligations.

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The current ratio is calculated as

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