Finance & Interest
Intermediate

Current Ratio

Liquidity measure of short-term solvency.

Formula

CR=Current AssetsCurrent LiabilitiesCR = \frac{\text{Current Assets}}{\text{Current Liabilities}}

Variables

Assets,LiabilitiesCurrent

Example

Above 1 is healthy

Did You Know?

A current ratio below 1 warns that a company may struggle to pay its short-term bills.

liquidity