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The following information was presented on one of the financial statements prepared by the Rouge Health Plan as of December 31, 1998:
Rouge's current ratio at the end of 1998 was approximately equal to:
Suggested Answer: C
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35 comments · newest first
LA
Lauran
11 months ago
1.31 is way too optimistic!
MA
Maile
11 months ago
Wait, are we sure about that 0.84? Seems low.
JO
Jonelle
12 months ago
Definitely agree, 1.19 seems more accurate.
RI
Rickie
12 months ago
I thought it would be higher!
ON
Oneida
1 year ago
Current ratio was 1.06.
CH
Charlie
1 year ago
I’m leaning towards option C, 1.19, but I’m not completely confident. I wish I had more time to double-check my calculations!
AU
Audra
1 year ago
I feel like I saw a similar question in our review sessions. I think the answer might be around 1.06, but I could be mixing it up with another example.
CO
Cory
1 year ago
I think the current ratio is calculated by dividing current assets by current liabilities. I hope I can remember the exact figures from the statement!
EL
Elden
1 year ago
I remember we practiced calculating the current ratio, but I'm not sure if I have the right numbers in my head.
RO
Ronnie
1 year ago
Okay, let me think this through. Current assets divided by current liabilities... I think I can do this, but I want to double-check my work to make sure I get the right answer.
EV
Evan
1 year ago
No problem, I've got this. The current ratio is a key financial metric, and I'm familiar with how to calculate it. I'll work through the numbers and select the right answer choice.
QU
Quiana
1 year ago
Hmm, I'm a little unsure about how to approach this. I know the current ratio is a measure of liquidity, but I'm not totally confident in my ability to calculate it correctly. I'll give it my best shot, but may need to come back to this one.
SH
Sharen
1 year ago
This looks straightforward enough. I just need to plug the numbers into the current ratio formula and see which answer choice is closest.
LI
Ligia
1 year ago
Okay, let's think this through step-by-step. The current ratio is calculated by dividing current assets by current liabilities. I'll need to use the information provided in the financial statements to calculate the current ratio and see which answer choice matches.
RE
Rebbeca
2 years ago
1.19, huh? I bet the accountants at Rouge had a field day crunching those numbers. What, did they use a calculator from the 90s or something?
RA
Rachael
2 years ago
Hmm, 1.19 current ratio? That's a pretty healthy balance sheet if you ask me. The Rouge team must be doing something right!
LO
Loren
2 years ago
That's true, it indicates they are in a strong financial position.
VI
Vi
2 years ago
It shows they have enough current assets to cover their current liabilities.
RE
Reita
2 years ago
I agree, a current ratio of 1.19 is definitely a good sign for Rouge Health Plan.
DE
Delbert
2 years ago
I'm going with option C. 1.19 is the correct current ratio based on the information provided in the financial statements.
MA
Marjory
2 years ago
I'm going with option C. 1.19 is the correct current ratio based on the information provided in the financial statements.
GR
Gracia
2 years ago
No, I'm pretty sure it's 1.31.
ES
Estrella
2 years ago
I think it's actually 1.06, not 1.19.
VI
Vilma
2 years ago
You're right, I didn't consider the quick ratio. It must be 1.06 then.
LO
Louann
2 years ago
But the quick ratio was 0.84, so it must be lower than 1.19.
VI
Vilma
2 years ago
I believe it was actually 1.19.
MI
Miesha
2 years ago
The current ratio of 1.19 seems about right. It's a common and reasonable ratio for a healthcare organization like Rouge Health Plan.
SA
Samira
2 years ago
Exactly, it's a good indicator of their ability to meet short-term obligations.
TA
Tammi
2 years ago
Yes, it shows that Rouge Health Plan has enough current assets to cover its current liabilities.
HI
Hillary
2 years ago
I agree, a current ratio of 1.19 is a good sign of financial health.
MY
Myra
2 years ago
D) 1.31
HE
Herminia
2 years ago
C) 1.19
HU
Hubert
2 years ago
B) 1.06
AN
Annamaria
2 years ago
A) 0.84
LO
Louann
2 years ago
I think the current ratio was 1.06.