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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.

Andrew Bloomenthal has 20+ years of editorial experience as a financial journalist and as a financial services marketing writer. David Kindness is a Certified Public Accountant (CPA) and an expert in ...

Understand what the current ratio measures, why it matters, and how to use it to assess and improve short-term liquidity. There’s no universal safe or danger level. Ideal current ratios vary by ...

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 ...