A business has current assets of Rs. 240,000 and current liabilities of Rs. 120,000. What is its current ratio?
Correct answer: C. 2:1
- A. 0.5:1
- B. 1:1
- C. 2:1
- D. 3:1
Explanation
The current ratio equals current assets divided by current liabilities: 240,000 ÷ 120,000 = 2. The ratio is therefore 2:1, while 1:1 would incorrectly treat the two amounts as equal.
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