Pradeep (Student) (150 Points)
12 March 2012dear experts & friends,
i am hereby want to know the importance of current assests & liabilities like debtors & creditors, loans & advances, prepaid expenses etc. & impact of the change in the current liabilities & current assets & their impact on cash flow.
kindly reply as early as possible.
kindly do the needful
Giridhar S Karandikar
(Team Lead)
(7543 Points)
Replied 15 March 2012
The Current Ratio which is defined as Current Assets/Current liabilities, shows how sound the busines is being carried on by the organization. A current ratio of 2 is the norm of the industry. However this may differ depending upon the nature of the busines the organization is carrying on. A current ration of2 means that the current assets should be twice your current liabilites. if the ratio is less than two then the liquidity of the comapny is not well.
Live class on PF & ESI Enrollment & Returns Filing(with recording)
CAclubindia
