A firm capital shows 5 L and that firm reserves shows 25 L. what does it mean? how can u analyse the position of the firm. Is this a good sign? comment pls.........
1 Replies
Sreeniketh Angara
(B. Com CA PCC CS Executive)
(699 Points)
Replied 29 June 2012
hi.... The Firm's Capital has no relation what ever to its reserves and surplusses. The Reserves and surpluses show the profits of the firm earned over a period of time. The Firms position will show favourable if its Current ratio is 2:1
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