dear experts & friends,
i am hereby want to know the importance of current assests & liabilities like debtors & creditors, loans & advances, prepaid expenses etc. & impact of the change in the current liabilities & current assets & their impact on cash flow.
kindly reply as early as possible.
kindly do the needful
The Current Ratio which is defined as Current Assets/Current liabilities, shows how sound the busines is being carried on by the organization. A current ratio of 2 is the norm of the industry. However this may differ depending upon the nature of the busines the organization is carrying on. A current ration of2 means that the current assets should be twice your current liabilites. if the ratio is less than two then the liquidity of the comapny is not well.
SKAA & Associates
New Delhi
CA Inter
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