ManagementParadise.com : Worlds Leading Management Portal. MBA | Classroom, Boardroom and Beyond


Go Back   ManagementParadise.com Forums - Your MBA Online Degree Program and Management Students Forum for MBA,BMS, MMS, BMM, BBA, students & aspirants. > Projects HUB for Management Students ( MBA Projects and dissertations / BMS Projects / BBA Projects > PUBLISH / UPLOAD PROJECT OR DOWNLOAD REFERENCE PROJECT > Financial Management

CURRENT RATIO

CURRENT RATIO

Discuss CURRENT RATIO within the Financial Management forums, part of the PUBLISH / UPLOAD PROJECT OR DOWNLOAD REFERENCE PROJECT category; CURRENT RATIO This ratio is an indicator of the firm’s commitment to meet its short-term liabilities. The ratio establishes a ...

Reply

 

LinkBack Thread Tools Display Modes
Advertisements
CURRENT RATIO
Old
 (1 (permalink))
Abhijeet S
abhishreshthaa is a splendid one to beholdabhishreshthaa is a splendid one to beholdabhishreshthaa is a splendid one to beholdabhishreshthaa is a splendid one to beholdabhishreshthaa is a splendid one to beholdabhishreshthaa is a splendid one to beholdabhishreshthaa is a splendid one to behold
 
abhishreshthaa
Operations Manager at Management Paradise
Management Paradise Guru
 
Status: Offline
Posts: 7,045
Join Date: May 2010
CURRENT RATIO - September 23rd, 2010

CURRENT RATIO


This ratio is an indicator of the firm’s commitment to meet its short-term liabilities. The ratio establishes a relationship between current assets and current liabilities.


Objectives:- The objective of computing this ratio is to measure the ability of the firm to meet its short term obligations and to reflect the short term financial strength of the firm.



Formula:-

Current Ratio = Current Assets
Current Liabilities



Here current assets are those assets which are converted into cash within a year. It includes the following: cash balances, marketable securities, bills receivable, payment of tax reduced at source, bank balance, stock, debtors, etc…


Current liabilities are those liabilities which are expected to be matured within a year and include the following: creditors, bills payable, short term loans and advances, provision for tax, bank overdraft, income received in advance, unclaimed dividend etc…


Changes in current ratio:-


The relationship between current assets and current liabilities is disturbed on account of a number of factors. They are as under:


1. Seasonal changes in the business


2. Over Trading: this results in accumulation of the stock and mounting up of debtors and creditors balances


3. Repayment of long-term liability


4. A change made in the terms of trade


Significance:-
The current ratio is an index of the concern’s financial stability since it shows the extent of the working capital which is the amount by which the current assets exceed the current liability.


As stated earlier a higher current ratio would indicate inadequate employment of funds while a poor current ratio is a danger signal to the management. It shows that the business is trading beyond its resources.
Advertisements


Help Others > Network > Grow


Work with us part time/full time as forum moderator. Email us your resume on careers @ managementparadise.com PLS PRESS THANKS BUTTON IF U LIKED MY POST.

Friends: (0)
Reply With Quote
Related to CURRENT RATIO
 

Similar Threads

Thread Thread Starter Forum Replies Last Post
Current Amatya Sharma HOT Debates - The Big Fight 4 March 30th, 2011 07:21 PM
Current ratio of Reliance Sunanda K. Chavan Financial Management ( FM ) 0 September 13th, 2010 03:16 PM
Current Ratio Sunanda K. Chavan Financial Management ( FM ) 0 September 13th, 2010 02:27 PM
Current Liability Sunanda K. Chavan Financial Management ( FM ) 0 September 13th, 2010 02:13 PM
ratio help renu85 Resolve Your Query - Get Help and discuss Projects 3 August 18th, 2008 12:16 PM
 

Reply

Bookmarks

Tags
current, ratio

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Trackbacks are On
Pingbacks are On
Refbacks are On


Login
Forgot Password?  New User?
  

» Ads





» Recent Threads

Hello Everyon
Last post by Bhautik Kawa
1 Hour Ago 06:12 PM
2 Replies
Indian Rupee Update by...
Last post by Market Magnify
2 Hours Ago 05:16 PM
4 Replies
Investment Banking...
Last post by Aaina Khan
3 Hours Ago 04:11 PM
3 Replies
Short Term Technical... ( 1 2 3... Last Page)
Last post by Windsor Brokers
3 Hours Ago 04:02 PM
66 Replies
Readers are advised to...
Last post by Hrishita Sahay
3 Hours Ago 03:39 PM
2 Replies
Asian Markets Update by...
Last post by Epic Research
6 Hours Ago 12:50 PM
4 Replies
Start Your Business with...
Last post by Juhani Gallen
7 Hours Ago 12:07 PM
0 Replies
Supply Chain Management...
Last post by Tom Murdoch
9 Hours Ago 10:03 AM
1 Replies
Test bank on... ( 1 2)
Last post by Yuut Muguh
17 Hours Ago 01:26 AM
11 Replies
Solution manual on... ( 1 2 3... Last Page)
Last post by Yuut Muguh
17 Hours Ago 01:25 AM
44 Replies
Solution manual on... ( 1 2 3... Last Page)
Last post by Yuut Muguh
17 Hours Ago 01:23 AM
30 Replies
Solution manual of... ( 1 2 3)
21 Hours Ago 09:30 PM
20 Replies
SSC vs CBSE vs ICSE vs...
Last post by Joel Francis
1 Day Ago 02:37 PM
0 Replies
Why is Market Research...
Last post by Maria Reese
1 Day Ago 11:26 AM
2 Replies
Soultion manual on... ( 1 2 3... Last Page)
Last post by Jolly Ehiabhi
1 Day Ago 08:17 AM
63 Replies

» Projects Helpline

project on privatisation
Last post by Shatrughna Bhoir
2 Days Ago 08:05 PM
topics related to 100...
Last post by Rachini Pandey
4 Days Ago 10:35 PM
Retail Management Notes
Last post by Rajesh Nimbunkar
6 Days Ago 05:12 PM
Final Year MBA Projects...
by Raasi
Last post by Raj Raj
1 Week Ago 03:23 PM
Project Management...
by onjono
Last post by Raj Raj
1 Week Ago 03:13 PM
ManagementParadise.com is not responsible for the views and opinion of the posters. The posters and only posters shall be liable for any copyright infringement.


Management Paradise
About Us
Press
Jobs
Contact Us
Kartik Raichura
Legal
Terms & Conditions
Privacy Policy
Disclaimer
Copyrights
Help
Zeitgeist
Support
FAQs
Tour
Feedback
Partners
Follow
Copyright © 2004 - 2013 Management Paradise. Site Developed by Available.co.in