Answer Posted / ravindra
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
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