If a company has Current Assets of $115,000 and Fixed Liabilities of $187,258, what is its Liquidity Ratio?

To determine the Liquidity Ratio, which often refers to the current ratio, the formula used is:

Current Ratio = Current Assets / Current Liabilities

From the information given, we have Current Assets at $115,000. However, the question provides Fixed Liabilities rather than Current Liabilities. For the Liquidity Ratio to be calculated correctly, it is critical to note that only Current Liabilities factor into the ratio.

Assuming that Fixed Liabilities are not part of the calculation, particularly if Current Liabilities are not specified, liquidity ratios primarily assess the firm's ability to cover short-term obligations with short-term assets. Without explicit consideration of Current Liabilities, we cannot compute an accurate ratio based simply on the data presented.

If we were, hypothetically, to continue with common scenarios, let's assume that any Current Liabilities are far lesser than Current Assets. This context points toward an indication that the company is in a solid liquidity position if Current Liabilities were speculated at lower figures; nevertheless, specific numbers would be needed to calculate a reliable ratio.

For calculating the exact Liquidity Ratio, the actual Current Liabilities figure is mandatory. An answer choice based on hypothetical ratios cannot be definitively concluded without this specific piece of information.

In summary, while