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 ...

Brian Beers is a digital editor, writer, Emmy-nominated producer, and content expert with 15+ years of experience writing about corporate finance & accounting, fundamental analysis, and investing.

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 ...