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

A current ratio is an accounting formula that defines a company's ability to meet its immediate and short-term obligations. The current ratio, sometimes called the liquidity ratio or the working ...

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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 ...

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

A fundamental flaw in U.S. GAAP and IFRS financial reporting standards distorts the calculation of working capital and the current ratio, resulting in a significant understatement in most companies’ ...

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 ...

The quick ratio, also known as the acid-test ratio, measures a company's ability to pay off its current debt. Current debt includes any liabilities coming due within a year, like accounts payable and ...