what is current ratio and how it is calculated
- 1 Answers
- 4063 Views
- I also Faced
- E-Mail Answers
Answer / james. e
It is a liquidity ratio that measures a company's ability
to pay short-term obligations.
The Current Ratio formula is:
Current Ratio=current assets/current liabilities
Also known as "liquidity ratio", "cash asset ratio"
and "cash ratio".
The ratio is mainly used to give an idea of the company's
ability to pay back its short-term liabilities (debt and
payables) with its short-term assets (cash, inventory,
receivables). The higher the current ratio, the more
capable the company is of paying its obligations.A ratio
under 1 suggests that the company would be unable to pay
off its obligations if they came due at that point. While
this shows the company is not in good financial health, it
does not necessarily mean that it will go bankrupt - as
there are many ways to access financing - but it is
definitely not a good sign.
This ratio is similar to the acid-test ratio except that
the acid-test ratio does not include inventory and prepaids
as assets that can be liquidated.
| Is This Answer Correct ? | 5 Yes | 0 No |
closing stock worth is 50000 and grossprofit is 20% how much profit would be accounted towards the nextyear?
What will be the journal entry of bank charges paid to bank
what is the procedure to get the duplicate Cform in case the original is lost in transit.
Expand C C A
I was born on 4th may 1981 iam i eligible to apply for SBI clerical job vacancy
fridge was capital or revenue?
what is the difference beetwen trade discount and rebate & discount
5 Answers Chartered Accountant, Punjab and Sind Bank,
what is the diff b/w manufactring a/c & trading a/c?
WHAT IS Amortisation??
11 Answers Capital IQ, FactSet Systems,
Respective sir I'm bcom 1st sem student. I have very interest in banking sector. I finished my pu with 88% how I can prepare for banking exam (especially po)yet I have no any practice but I hope if I get good guidance I can pass my banking exam so kindly inform me how I can prepare for po exams. My email address is- 98anjuma@gmail.com. I'm really counting second when I will get ans by u. Thank you sir
tell me about a time you had to deal with a conflict between a licensed and unlicensed personnel and how handled the situation?
Clasify capital
Audit 
