This week, I'm focusing on another ratio to help gauge a company's financial health: the Current Ratio. It's calculated by dividing current assets by current liabilities. The higher the ratio, the ...

A company needs to have enough liquidity to meet its short-term financial obligations or else it won't be successful. The current ratio is an accounting metric that provides one measure of liquidity.

When a business offers credit to a favorite customer, loyalty and the desire to make the sale often play roles in the move. But one thing the financial crisis taught American businesses is that it’s ...

Liquidity ratios are key financial ratios used by internal and external analysts to gauge a company's liquidity, which represents its capacity to pay its existing short-term liabilities if it needs to ...

Learn essential financial ratios for early bankruptcy detection and protect your investments by identifying warning signs of financial distress in companies.

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Current ratio is a measure of liquidity, which compares a company's current assets with its current liabilities. Current ratio is a favored test among banks and lenders because it reveals whether a ...

What does the current ratio show? The current ratio shows a company’s ability to pay off debt. It can have a significant impact on how traders and investors see a company, which means the ratio can ...

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 ...