Ideal current ratio is

Correct Answer: D) 2 : 1

Why this option is correct?

Current Ratio shows the relationship between Current Assets and Current Liabilities.
The generally accepted ideal ratio is 2 : 1, which means the firm should have
₹2 of current assets for every ₹1 of current liability.
This provides a reasonable margin of safety to meet short-term obligations.
Hence, option D is correct.

Why other options are wrong?

A) 1 : 1
1:1 is the ideal Liquid (Quick) Ratio, not the Current Ratio.

B) 1 : 2
This means current assets are less than current liabilities, showing poor liquidity.

C) 5 : 2
Though better than 1:1, this is not the standard or ideal ratio accepted in practice.