Understand what the current ratio measures, why it matters, and how to use it to assess and improve short-term liquidity.

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 ...

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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 ...

Company balance sheets show the long-term financial health of the company, if investors know where to look. The current ratio is a measure of liquidity that lets investors know if a company can or ...

David Kindness is a Certified Public Accountant (CPA) and an expert in the fields of financial accounting, corporate and individual tax planning and preparation, and investing and retirement planning.

A quick ratio below industry standard means that your company has a relatively lower liquidity position than its competitors on one of the three common liquidity ratios used by companies. The quick ...

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 ...

Understand what the current ratio measures, why it matters, and how to use it to assess and improve short-term liquidity.