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why current ratio is 2:1.why it is not 100:1,10:1,20:1 in
current ratio. please tell me....
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Answer Posted / shivani jhamb
Current ration shows the relationship between current
assets & current liablities. ideal current ratio is 2:1,
its shows that the compay is having 2 assets(enough cash)
to fullfill the each liablity. If current assets is more
than 2:1 then its shows that the funds are unnecessarily
blocked in the current assets,It affects the profitability
of the organisation.
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