Understand what the current ratio measures, why it matters, and how to use it to assess and improve short-term liquidity.

The current ratio is calculated by dividing a company’s current assets by its current liabilities. Ratios of 1 or higher indicate short-term solvency. It’s important to keep in mind that the current ...

What does the current ratio show? The current ratio shows a company’s ability to pay off debt. It can have a significant impact on how traders and investors see a company, which means the ratio can ...

If you're trying to gauge the financial health of a company before you invest, the current ratio is a key statistic to consider. Here's why. Company balance sheets show the long-term financial health ...

A fundamental flaw in U.S. GAAP and IFRS financial reporting standards distorts the calculation of working capital and the current ratio, resulting in a significant understatement in most companies’ ...

The quick ratio, also known as the acid-test ratio, measures a company's ability to pay off its current debt. Current debt includes any liabilities coming due within a year, like accounts payable and ...

Current ratio is a measure of liquidity, which compares a company's current assets with its current liabilities. Current ratio is a favored test among banks and lenders because it reveals whether a ...

A current ratio is an accounting formula that defines a company's ability to meet its immediate and short-term obligations. The current ratio, sometimes called the liquidity ratio or the working ...