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The current ratio is a liquidity ratio that measures a company’s ability to cover its short-term obligations with its current assets. Learn how it is used.
The current ratio, also known as the working capital ratio, measures the capability of a business to meet its short-term obligations that are due within a year. The ratio considers the weight of total current assets versus total current liabilities.
The current ratio or working capital ratio is a ratio of current assets to current liabilities within a business. In other words, it is defined as the total current assets divided by the total current liabilities. The current ratio is one of the oldest ratios used in liquidity analysis.
The current ratio indicates a company's ability to meet its short-term obligations. The formula is current assets divided by current liabilities to equal the current ratio.
The current ratio (also known as the current asset ratio, the current liquidity ratio, or the working capital ratio) is a financial analysis tool used to determine the short-term liquidity of a business.
The current ratio is a financial metric that measures the liquidity of a company by comparing the current assets belonging to a company to its current liabilities to determine if the liquid assets are sufficient to meet its short-term obligations coming due within twelve months (or one-year).
The current ratio, sometimes referred to as the working capital ratio, is a metric used to measure a company's ability to pay its short-term liabilities, or those due within a year. In...
What is Current Ratio? The current ratio is one of the most common measures of liquidity. It refers to the ratio of current assets to current liabilities. Current Ratio Formula. The formula for current ratio is: Current ratio = Current assets ÷ Current liabilities.
The Current Ratio provides valuable insights into a company’s liquidity. It’s particularly useful when assessing the short-term financial health of potential investment opportunities.
The current ratio is liquidity and efficiency ratio that calculates a firm's ability to pay off its short-term liabilities with its current assets. The current ratio is an important measure of liquidity because short-term liabilities are due within the next year.