Current ratio

• A measure of liquidity calculated by dividing the firm's current assets by its current liabilities.

• Refers to the amount of an entity's current assets divided by the amount of current liabilities.

• Indicator of short-term debt paying ability. Determined by dividing current assets by current liabilities. The higher the ratio, the more liquid the company.

• Indicator of company's ability to pay short-term obligations, calculated by dividing current assets by current liabilities. Used to compare companies within a single industry. The higher the ratio, the more Liquid the company.


Follow this link for all the terms related to ratio.

 Embedded terms in definition
Current assets
Current liabilities
 Related Terms
Acid test ratio
All current rate method
Appraisal ratio
Asset/equity ratio
Average price earning ratio
Cash flow coverage ratio
Cash ratio
Common equity ratio
Constant payout ratio dividend policy
Conversion ratio
Cost benefit ratio
Current / noncurrent method
Current account
Current assets
Current coupon
Current coupon issues
Current expenditure
Current issue
Current liabilities
Current maturity
Current pe ratio
Current price / current eps.
Current principal factor
Current principal value
Current rate method
Current yield
Days' sales in inventory ratio
Debt equity ratio
Debt ratio
Debt service coverage ratio
Debt to capital ratio
Debt to equity ratio
Debt/equity ratio
Dividend payout ratio
Earnings retention ratio
Expense ratio
Financial ratio
Fixed asset turnover ratio
Fixed charge coverage ratio
Funding ratio
Gold/silver ratio
Hedge ratio delta
Income replacement ratio
Interest coverage ratio
Inventory turnover ratio
Lagging pe ratio
Leading pe ratio
Long term debt ratio
Long term debt to equity ratio
Low price earnings ratio effect
Margin of profit ratio
Market book ratio
Market to book ratio
Operating profit ratio
Other current assets
P/e ratio
Payout ratio
Pe ratio
Pe ratio to eps growth
Plowback ratio
Preferred equity ratio
Price buy zone ratio
Price earnings ratio
Price to book ratio
Price to cash flow ratio
Price to earnings ratio
Price to sales ratio
Price/book ratio
Price/earnings p/e ratio
Price/sales ratio
Projected pe ratio
Q ratio or tobin's q ratio
Quick acid test ratio
Quick asset ratio
Quick ratio
Ratio analysis
Ratio of exchange
Ratio of exchange in market price
Ratio spread
Ratio writes
Receivables turnover ratio
Retention ratio
Reward to volatility ratio
Sharpe ratio
Target dividend payout ratio
Target payout ratio
Times interest earned ratio
Total debt to equity ratio
Trailing pe ratio
Upside/downside ratio
Working capital ratio
Yield ratio

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