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Current ratio of Reliance Textiles Ltd. is 1.5 at present. In future it wants to improve this ratio to 2. Suggest any two accounting transactions for improving the current ratio. - Accounts

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Question

Current ratio of Reliance Textiles Ltd. is 1.5 at present. In future it wants to improve this ratio to 2. Suggest any two accounting transactions for improving the current ratio.

Very Short Answer
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Solution

Following are two accounting transactions for improving the current ratio.

  1. Payment of current liabilities
  2. Issue of share capital or raising a long-term loan.
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Chapter 14: Ratio Analysis - SHORT ANSWER QUESTIONS [Page 14.106]

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D. K. Goel Accountancy Volume 1 and 2 [English] Class 12 ISC
Chapter 14 Ratio Analysis
SHORT ANSWER QUESTIONS | Q 19. | Page 14.106
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