What is the Meaning of Current ratio?
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Answer / ravi
curent ratio is the ratio which explains the relation ship
between current assets ¤t liabilities the ideal ratio
for current ratio is 2:1 for every 1 rs of liability there
must be 2 rs of asset the formulae for this is
current ratio= current assets/current liabilities
current asets = stock, debtors, cash in hand, cash at bank
current liabilities = creditors, b.p
| Is This Answer Correct ? | 24 Yes | 0 No |
Answer / rajeev shivale
Current ratio=current assets /current liabilities
The ideal current ratio is 2:1,it means that if tomorrow
the assets are reduced to half of there value, still it
will be able to full fill the liabilities.
It cannot be followed blindly because the company having
ideal current ratio may not be doing well, they may have
the slow moving debtors,obsolete goods thus threating the
short term solvency.
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Answer / paramkusamkrishnakanth
current assets/current liabilities=2/1.
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