If Joe and Mary’s farm has a current ratio of 1.5 and liabilities of $200,000, what is the value of their current assets?

To determine the value of Joe and Mary's current assets, we start with their current ratio, which is defined as the ratio of current assets to current liabilities. In this case, the current ratio is given as 1.5, and we know their total liabilities amount to $200,000.

The current ratio formula can be expressed as:

Current Ratio = Current Assets / Current Liabilities

We can rearrange this formula to solve for current assets:

Current Assets = Current Ratio x Current Liabilities

Substituting the known values into this formula:

Current Assets = 1.5 x $200,000

Calculating this gives:

Current Assets = $300,000

The correct answer and reasoning must be clarified as the one suggested does not correctly calculate current assets. In reality, the value of their current assets is $300,000 given the current ratio and total liabilities.

This indicates that the understanding of current ratios and how to manipulate the formula is critical in agribusiness management, as it provides insight into the liquidity and overall financial health of the farm. It is important to ensure accurate calculations when dealing with financial metrics in the agricultural context.