Question

Select the appropriate answer from the alternatives given below & rewrite the completed statement
Generally current ratio should be _______________.

Options

•  2:1

•  1:1

•  3:1

• 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.