What is Currebt ratio and what is the acceptable ratio. What is leverage and how can this be calculated . What is the acceptable limit

Question

Accepted Answer

Current ratio measures a company's ability to pay its short-term liabilities with its short-term assets. Leverage measures the amount of debt used to finance a company's assets.

Current ratio is calculated by dividing current assets by current liabilities
Acceptable current ratio varies by industry, but generally a ratio of 2:1 is considered good
Leverage is calculated by dividing total debt by total assets
Acceptable leverage ratio varies by industry, but generally a ratio of 2:1 is considered high
High leverage can indicate financial risk and may make it difficult for a company to obtain financing

Accepted Answer

Dear sir,
Loang time working in bihar collection and sales experience in automotive and finance banking sector current working

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What is Currebt ratio and what is the acceptable ratio. What is leverage and how can this be calculated . What is the acceptable limit

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