Interested to Buy Any Domain ? << Click Here >> for more details...
Why 2:1 is considered as ideal current ratio?
- 4 Answers
- 38410 Views
- Genpact, I also Faced
- E-Mail Answers
Answers were Sorted based on User's Feedback
Answer / prasanth p
If a company's current ratio is in the range 2:1, then it
is generally considered to have good short-term financial
strength. If current liabilities exceed current assets (the
current ratio is below 1), then the company may have
problems meeting its short-term obligations. If the current
ratio is too high, then the company may not be efficiently
using its current assets or its short-term financing
facilities.
| Is This Answer Correct ? | 35 Yes | 5 No |
Answer / shailendra srivastava
2:1 is current assets/current liabilities ratio of ideal
concern.
| Is This Answer Correct ? | 34 Yes | 6 No |
Answer / bhuvananatesh
2:1 is the ideal current ratio ,forget the golden
rule,there is no ideal ratio like that, it depends upon the
composition of current assets,if the firm conatains obsolte
stock or aged debtors in their current asses,2:1 is not the
ideal current ratio.
| Is This Answer Correct ? | 21 Yes | 12 No |
Answer / kushal jani
This is ideal because if a company has more current assets than current liabilities it can easily meet short term financial obligation.
it shows the company has maintained it's assets and liabilities according to the condition.
if the current ratio is below one then company has more current liabilities than current assets which shows company may face problems to meet the short term financial obligation.
If the company has too high current ratio, which shows company is not using it's assets effectively.
| Is This Answer Correct ? | 4 Yes | 1 No |
why inward bill register (IBR)not called as Bills Payable?
Hello to every body ... Its not its not a interview question In accounting field can we make Money ?
whats is the Journal entry for Telephone Expenses?
what about your self
8 Answers Capital IQ, FactSet Systems,
if cash deposited in to bank what will be entry?
Expand B L
on fellowing which assest shouldn't be depriciate?a) furniture , b)television c)goodwill d)printer
What is Demat Account? what is the use of it?
what is debit/credit note ? what deffered income and expencess?
depreciation on plant and machinery send me journal entry
what is trailbalance..?
what are the items comes under the profit appropriation account?
Audit 
