Dratif corporation's working capital is $33,000 and its current liabilities are $80,000, the current ratio is closest to 1.41 .
Which current ratio is ideal?
A healthy current ratio is usually between 1.5 and 2, but it can vary depending on the industry your business belongs to. Businesses can use current indicators to determine whether they have sufficient cash flow to cover their immediate obligations and liabilities when necessary.
What does 1.2 for the current ratio mean?
A company's ideal liquidity ratio is between 1.2 and 2, indicating that it has twice as many current assets as its liabilities to service its liabilities. If the current ratio is less than 1, the company does not have enough cash to pay its current liabilities.
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