Jones Company has Cash of $600, Accounts Receivable of $500, Office Supplies of $100, and a Building with a cost of $50,000. Jones Company owes $300 on Accounts Payable and has Salaries Payable of $200. What is Jones Company's current ratio?

2.4

Explanation:

Jones Company's total current assets = $600 (cash) + $500 (accounts receivable) + $100 (Office supplies) = $1,200

total current liabilities = $300 (accounts payable) + $200 (salaries payable) = $500

current ratio = $1,200 / $500 = 2.4

the current ratio measures a company's short term liquidity, or its ability to generate enough cash to pay its short term debts.

rational decision making is a multi-step process for making choices between alternatives. the process of rational decision making favors logic, objectivity, and analysis over subjectivity and insight. the word “rational” in this context does not mean sane or clear-headed as it does in the colloquial sense.

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