Question

Select the appropriate answer from the alternatives given below & rewrite the completed statements :

Generally current ratio should be _______________.
a) 2:1
b) 1:1
c) 3:1
d) 1:2

Answer 1

Generally current ratio should be 2:1

Explanation: The ideal current ratio should be 2:1. That is, the assets of a firm must be twice its liabilities. This ensures that the firm would not default in meeting its short-term obligations.