The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or liabilities which are due within a year. The current ratio is a comparison of current assets to current liabilities.
The current ratio is also known as the working capital ratio so don't get confused by different names. A current ratio below 1 is not good, which means the company does not have enough assets to cover its debts.
The current ratio between 1.5 to 2.5 is healthy which means the company has two times more current assets than liabilities to cover its debts.
The formula for caculating current ratio is as follows:
current ratio = current assets / current liabilities
What can you do with Current Ratio Calculator?
- It helps to calculate a firm's current ratio and helps to measure the liquidity of any company.
- Users can see the accurate value of the current ratio.
- This calculator helps to share your calculations by URL.