Answer pls

A firm capital shows 5 L and that firm reserves shows 25 L. what does it mean? how can u analyse the position of the firm. Is this a good sign? comment pls.........

Replies (1)

hi.... The Firm's Capital has no relation what ever to its reserves and surplusses. The Reserves and surpluses show the profits of the firm earned over a period of time. The Firms position will show favourable if its Current ratio is 2:1

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