18 Which of the following statements about accounting ratios and their interpretation are correct?1

18 Which of the following statements about accounting ratios and their interpretation are correct?

1 A low-geared company is more able to survive a downturn in profit than a highly-geared company.

2 If a company has a high price earnings ratio, this will often indicate that the market expects its profits to rise.

3 All companies should try to achieve a current ratio (current assets/current liabilities) of 2:1.

A 2 and 3 only

B 1 and 3 only

C 1 and 2 only

D All three statements are correct

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