Ratio: Current Assets divided by Current Liabilities.
Example: The Round Number CompanyCurrent Assets = 132; Current Liabilities = 36 Current Ratio = 132/35 = 3.7 |
This ratio is a measure of the company’s liquidity. It looks at the ability to pay bills (Short-term Debt) out of the Current Assets.
Also known as the Working Capital Ratio.
See also Liquidity Ratios, Acid-Test Ratio, Cash Ratio.
term list.