current ratio? asked on 30/7/09

Answer Posted / durga naidu

Current ratio means this ratio measures the solvency of the
company in the short term.

Current Asset,loans & Advances
______________________________________
Current liabilities & provision

A high current ratio may be due to the piling up of
inventory,ineffciency of collection of debtors,high
balances in cash and bank a/c without proper investment
etc.

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