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 ...

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Claire Boyte-White is the lead writer for NapkinFinance.com, co-author of I Am Net Worthy, and an Investopedia contributor. Claire's expertise lies in corporate finance & accounting, mutual funds, ...

A quick glance at Wal-Mart's balance sheet reveals that the company cannot meet all of its bills falling due within 12 months, but should you be worried? Why is this important? Well, if a company's ...