The current ratio of a company is 2:1. Which one of the following suggestions would improve the current ratio?

Correct option is C

The current ratio is calculated as:

$$\text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}}$$​

Paying a current liability reduces the denominator (current liabilities), thereby improving the current ratio.
Information Booster:
· A higher current ratio indicates better liquidity and ability to meet short-term obligations.
· The ideal current ratio is typically 2:1, but this can vary depending on the industry.