Answer:
year 1, 1.3: year 2, 1.25
Explanation:
The current ratio serves as a metric to assess how well a company can meet its short-term obligations as they come due.
The formula for determining current assets
Current ratio = current assets / current liabilities
For year 1,
Current assets: $650,000, current liabilities: $500,000
Current ratio = $650,000 / $500,000
Current ratio = 1.3
For year 2:
Current assets: $750,000; current liabilities: $600,000
Current ratio = $750,000 / $600,000
Current ratio = 1.25