Question : The Current Ratio of a company is 2:1. State, that the following transaction would improve, reduce or alter the current ratio.
Issue of new shares against the purchase of fixed assets.
Option 1:
Improve
Option 2:
Reduce
Option 3:
Alter
Option 4: Not alter
Answer (1)
17th Jan, 2024
Correct Answer: Not alter
Solution :
Neither current assets nor current liabilities are affected because non-current and Non-current liabilities are increased by the same amount.
Hence, the correct ratio is option 4.
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