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Answer Posted / 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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