Question

A firm has current assets ₹2,50,000 and current liabilities ₹1,00,000. Find the current ratio.

• A. 1.5:1
• B. 2:1
• C. 2.5:1
• D. 3:1

Hint:

The current ratio helps assess a firm's liquidity by comparing its current assets to current liabilities. A higher ratio indicates better short-term financial health.

Answer 1

The Correct Option is C

The current ratio, determined by dividing current assets by current liabilities, is calculated as: \[ \text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}} = \frac{2,50,000}{1,00,000} = 2.5 \] Therefore, the current ratio stands at 2.5:1.