Corporate finance

 M.COM. SEMESTER – II (CBCS) CORPORATE FINANCE      Q.9. explain current ratio and advantages ANS: This ratio measures the solvency of the company in the short-term; current assets are those assets which can be converted into cash within a year. Current liabilities and provisions are those liabilities that are payable within a year.                                               Current Assets, Loans & Advances                                              Current Liabilities & Provisions A current ratio of 2:1 indicates a highly solvent position A current ratio of 1.33: 1 is considered by banks as the minimum acceptable level for providing working capital finance. The constituents of the current assets are as important as the current assets themselves for evaluation of a company’s solvency position. A very high current ratio will have adverse impact on the profitability of the organization. A high current ratio may be due to the piling up of inventory, inefficiency in collection of debtors, high balances in cash and bank accounts without proper investment etc. Advantages of Current Ratio 1. This ratio indicates the extent of current asset available to meet the current obligations. It is only from the current assets the immediate obligations (current liabilities) are met with. Therefore, the interest of creditors lies in this ratio. 2. The safe ratio is 2:1. This means, for every current liability of Rs. 1, there should be current assets of Rs. 2, so that the firm can conveniently meet its current obligations, even if the assets like stock or debtors are not quickly realized. 3. This margin also leaves sufficient amount as working capital to carry out day-to-day transactions. 4. This is useful in assessing the solvency and liquidity position of the company.   If you want exam most important question bank pdf then you have to pay per subject 100/- rupees only .  Contact 8652719712 / 8779537141            Telegram Group Mumbai Univeersity :- https://t.me/mumbaiuniversityidol Suraj Patel Education :- https://t.me/surajpateleducation   F.Y.J.C EXAM :- https://t.me/FYJCexam   S.Y.J.C EXAM :- https://t.me/SYJCexam   F.Y EXAM :- https://t.me/fyexam     S.Y EXAM :- https://t.me/syexam     T.Y EXAM :- https://t.me/tyexam     M.Com Part 1 EXAM :- https://t.me/McomPart1Exam   M.Com Part 2 EXAM :- https://t.me/McomPart2Exam M.A EXAM :- https://t.me/mastudentsexam  YouTube Channel  https://www.youtube.com/channel/UCv8JIY58xfWHUIXVu9wxNHw     Mumbai University corporate finance M.com Semester 2 questions and answers M.com Corporate Finance Questions and Answers Part – 1 M.com Part 1 Semester 2 corporate finance questions and answers M.com part 1 sem 2 corporate finance ,Mumbai university question papers m.com. semester – ii (cbcs) corporate finance questions and answers corporate finance mumbai university solved question papers download pdf corporate finance m.com sem 2 imp questions pdf mumbai university corporate finance m.com sem 2 pdf mumbai university m.com part 1 sem 2 corporate finance mcq pdf m.com part 1 question papers with answers idol m.com question papers with answers pdf mumbai university m.com part 1 sem 2 corporate finance book pdf m.com sem 2 corporate finance question paper corporate finance m.com sem 2 manan prakashan m.com question papers with answers pdf mumbai university m.com question papers with answers pdf mumbai university part 2 m.com question papers with answers pdf mumbai university m.com question papers with answers pdf mumbai university part 2