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1. If current liabilities are $500 and the current ratio is 5. How much is current...

1. If current liabilities are $500 and the current ratio is 5. How much is current assets? 2. Current assets are $500 and the current ratio is 5. How much is current liability?
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Answer #1

Current Ratio = Current Assets/ Current Liabilities

Case 1:

Current Liabilities = $500, Current Ratio = 5

Current Assets = 5 × $500

Current Assets = $2500

Case 2:

Current Assets = $500, Current Ratio = 5

Current Liabilities =  $500/5

Current Liabilities = $100

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