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.

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There’s no universal safe or danger level. Ideal current ratios vary by industry. A current ratio of 1.0 means the company has $1 in current assets for every $1 in current liabilities. A ratio below 1 ...

Current liabilities include short-term financial obligations due within a year. Investors should monitor companies' current ratios to assess financial strength. A current ratio above 1 indicates a ...

Liquidity ratios assess if a company can cover short-term debts with available assets. Key ratios include cash, quick, current, and operating cash flow ratios. A liquidity ratio over 1 suggests a ...

Financial ratios are an indicator of health for any business. They may seem esoteric, but to lenders and investors they tell the true story of a company's financial strength and ability to weather an ...