Accounting for IGCSE & O level - Advanced Principles (Section 8 - No. 24)
What does it mean to have a current ratio greater than 1?
The business has more liabilities than assets.
The business has more current assets than liabilities.
The business is struggling to meet its short-term obligations.
The business is not efficiently using its assets.
Explication
A current ratio over 1 indicates sufficient current assets to cover current liabilities.