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

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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