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.

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 ...

A quick ratio tests a company’s current liquidity and solvency. It is a measure of whether the company can pay its short-term obligations with its cash or cash-like assets on hand. (Short term ...

What does the current ratio show? The current ratio shows a company’s ability to pay off debt. It can have a significant impact on how traders and investors see a company, which means the ratio can ...

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