what is current ratio formula
- 9 Answers
- 9513 Views
- Sundaram Motors, I also Faced
- E-Mail Answers
Answers were Sorted based on User's Feedback
Answer / suresh
current ratio= current assets / current liabilities
| Is This Answer Correct ? | 32 Yes | 1 No |
Answer / sanmilan
The answer is same as above i.e.
Current Ratio = Current Assets/Current Liabilities
The higher the current ratio, the more capable the company
is of paying its obligations.The desirable ration is '1'.
A lower ratio shows poor Financial Condition of the
Organization and needs attention to probe into the causes
and remedial actions. It also indicates that additional
Financing would be needed to run the Organization.
More attention to be given on the 'Receivables' as well as
Dead Investments, Bad Investments as well as Credit Policies.
| Is This Answer Correct ? | 13 Yes | 0 No |
Answer / pradeep
the formula of current ratio in acconting is = current
assets/current liabilities
current assetes = cash in hend , current debtors, stock etc.
current liabilities = creditors , short term loan , all
short terms payable etc.
| Is This Answer Correct ? | 4 Yes | 0 No |
Answer / jyothi.p
Current Ratio= Current Assets/Current Liabilities
Where Current Assets= cash in hand, cash at bank,
debitors,bills receivable, work in progress,closing stock,
shortterm investments, prepaid expenses etc.
Where Current liabilities= trade creditors,Bills
payable,bank overdraft,income tax payable,outstanding
expenses,shortterm advances etc.
A ratio equals or near to 2:1 is satisfactory
High current ratio indicates the firm is liquid and has an
ability to pay its current obligations in time
Low current ratio represents that the firms
liquidity/working capital position is not good & company
may face problems in payment of current liabilities.
| Is This Answer Correct ? | 3 Yes | 0 No |
current ratio explains the relatin ship between current
assets and current liabilities
current assets - cash,stock,debtors,bills receivable e.t.c
current liabilities - sundry creditors, bills payable
current ratio= current assets / current liabilities
the ideal ratio for this is 2:1 this indicates for every 2
rs of asset there must be 1 rupee of liability
| Is This Answer Correct ? | 2 Yes | 0 No |
Answer / mahi peddi
current assets/current liabilities
the ideal ratio must be 2:1
| Is This Answer Correct ? | 0 Yes | 0 No |
Answer / nisha sagore
current ratio = current assesta - current liabilities
| Is This Answer Correct ? | 0 Yes | 0 No |
What is Goodwill?
What is the different between Tally 7.2 & Tally 9.0
what is the provisional of salary?
how to treat visa renewal expenses in a company ? is it a prepaid expense?
If salary paid per month Rs 40000/ I will deduct TDS from his salary, please what I do explain.(send Urgently)
A factory uses annually 24,000 units of a raw material which costs Rs. 1.25 per unit. Placing each order costs Rs. 25 and carrying cost is 6% per year of the average inventory. (a) Find the economic order quantity and the total inventory cost including the cost of material.
Pass the journal entry: rent outstanding
My question is on Opening & Closing Stock Suppose Closing stock of 2014-15 is Rs 30 lakhs & Also we filed return & ROC too for 2014-15. Opening stock for 2015-16 should be Rs 30 lakhs but we found that some purchase for feb & March 2015 Stock has been entered in tally Its taken directly to purchase split of stock not made & in sales to same of 2 lakhs no split of stock is shown. Those stock need to make changes in 2015-16 what was the process ? And what will be adjustment entry ?
Types of errors in account
does goodwill depreciates ?
Factors that affect the requirement of working capital ?
Called-up capital ?
Audit 
