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

C