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Answer Posted / ravindra
This ratio explains the relation ship between current
assets & current liabilities wher as current assets =cash,
debtors , bills receivable, where as current liabilities=
creditors, bills payable, the formulaae for caluculating
current ratio = current assets/ current liabilities
the ideal of current ratio is 2:1 this indicate for every 2
rs of asset there must be 1 rupee of liability
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