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8. Analyze the Current Ratio of the following three companies. (Marks Allotted: 1+1=2) Current Ratio Companies 1.7:1 Z 2.5:1
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8.

a) Company Y has is strong in liquidity since it has highest current ratio among three companies.

b) The company Y is selected to be strong in liquidity as it has ratio of 2.5 : 1
The company with current ratio of 2 or more is ideal as it represent higher current assets compared to current libailities.
Current Assets of company Y are 2.5 times Current Liabilities.

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