CUET Preparation Today
What is the ideal Current Ratio? |
1 : 1 2 : 1 1 : 2 0.5 : 1 |
2 : 1 |
The correct answer is Option (2) - 2 : 1. The ideal current ratio is 2:1. Current Ratio = Current Assets / Current Liabilities. This ratio measures the company's ability to pay off its current liabilities with its current assets. A Current Ratio greater than 1 indicates that the company has sufficient current assets to cover its current liabilities, which is considered a healthy liquidity position. The ideal ratio is 2:1. |
