Generally current ratio should be __________.

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.