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.

If you are an investor, the current ratio is a measure you’ll likely want to use to analyze the companies in which you are considering investing. The current ratio is a liquidity measure. It ...

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When you’re evaluating a potential investment, you likely look at profitability and growth, but there is one fundamental concept you must master first: liquidity. Just as a household needs enough cash ...

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’ ...

What is a good current ratio? A good current ratio should be higher than one. This would indicate that the company can cover its liabilities with its assets. If the current ratio is lower than one, it ...