Finra Series-7 Exam - Topic 3 Question 6 Discussion

Actual exam question for Finra's Series-7 exam

Question #: 6
Topic #: 3

A large manufacturing company has current assets of approximately $9,400,000 and current liabilities of about $4,900,000.

Which of the following statements is true about the current ratio?

Ait is substantially below the standard minimum

Bit is somewhat below the standard minimum

Cit is about the standard minimum

Dit is somewhat above the standard minimum

Show Suggested Answer

Suggested Answer: B

it is somewhat below the standard minimum. The standard minimum current ratio for a manufacturing company is 2 to 1. The current ratio for this company is 1.92 (9,400,000 divided by 4,900,000).

by Claribel at May 05, 2022, 12:46 AM

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Mabelle

3 months ago

Wait, are we sure those numbers are accurate?

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Benton

3 months ago

Not sure, but it seems pretty healthy to me.

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Gerry

3 months ago

I think that's actually above the standard minimum.

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Krystina

4 months ago

That gives a current ratio of about 1.92!

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Barb

4 months ago

Current assets are $9.4M and liabilities are $4.9M.

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Merri

4 months ago

I feel like this current ratio is probably okay, but I can't recall if "somewhat above" means it's safe or just acceptable.

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Coleen

4 months ago

I practiced a similar question where the current ratio was below 1, and I think that was considered risky.

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Alverta

4 months ago

I think the standard minimum for a current ratio is around 1.0, so with those numbers, it might be just above that.

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Glenn

5 months ago

I remember the current ratio is calculated by dividing current assets by current liabilities, but I'm not sure what the standard minimum is.

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Kami

5 months ago

Okay, let's see here. I think the key is to make sure the reports are accessible within the model-driven app. Sharing and adding them to the site map seem like good options to explore.

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Izetta

5 months ago

Okay, I think I know the answer to this. Let me double-check my understanding before selecting an option.

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