Question : The Current Ratio of a Company is 2:1. Redemption of Debentures would
Option 1: Increase current Ratio
Option 2: Decrease Current ratio
Option 3: Have no effect on current ratio
Option 4: Decrease gross profit ratio
Answer (1)
24th Jan, 2024
Correct Answer: Decrease Current ratio
Solution : Answer = Decrease Current ratio
Redemption of Debentures
Both Current assets and Current liabilities will be reduced. So, the Current ratio will be
decreased
.
Hence, the correct option is 2.
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