should current ratio be more than 2 in order to conclude that it is good , why instructor told p&g current ratio is good even it is under 1

Hi, a current ratio of 2 indicates that the company has $2 of current assets for every $1 of current liabilities. Whether this is good or bad depends on the specific company and industry. For example, if most competitors have a current ratio of 0.1 and ours is 0.7, then this is an indicator of a better liquidity position. We need to have a proper benchmark in order to say whether a certain ratio is good or bad. I hope this answers your question. Best, The 365 Team

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Muhammad Mishhal Nas

Last answered:

16 Mar 2023

Posted on:

10 Mar 2023

current ratio under 2 is good or bad

in Accounting and Financial Statement Analysis / Practical Exercise Analyzing P&G's Business Through Financial Ratios (1 of 2)

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Antoniya Baltova

Instructor

Posted on:

16 Mar 2023

current ratio under 2 is good or bad

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