Answer pls

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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.........

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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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