The current ratio is a financial metric that measures a company's ability to pay short-term obligations with its current assets. It is calculated by dividing current assets by current liabilities.
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A current ratio greater than 1 indicates that a company has more current assets than current liabilities.
A very high current ratio may suggest inefficient use of assets or excessive liquidity.
The formula for the current ratio is Current Assets / Current Liabilities.
The current ratio is used to assess a company's short-term financial health and liquidity.
It can be found on the balance sheet, typically under the sections for current assets and current liabilities.