Can a very low current ratio indicate a risk of insolvency?

The current ratio, also known as the working capital ratio, measures the capability of a business to meet its short-term obligations that are due within a year. Sep 11, 2024 ... A good liquidity ratio is anything greater than 1. It indicates that the company is in good financial health and is less likely to face financial hardships. Liquidity Ratios. Current Ratio - A firm's total current assets are divided by its total current liabilities. It shows the ability of a firm to meets its ... Feb 11, 2025 ... Liquidity ratios provide insights into your company's short-term cash flow and ability to meet immediate obligations. The Current Ratio equals a company's Current Assets divided by its Current Liabilities. It indicates whether a company can adequately meet its short-term ... Current ratio - definition from Morningstar : A liquidity ratio measuring current assets/ current liabilities. Working capital does indicate liquidity, but it's a broader measure than current ratio. It reflects a company's ability to cover its short-term liabilities with ... Current ratio ... The current ratio is a liquidity ratio that measures whether a firm has enough resources to meet its short-term obligations. It is the ratio of ... Jul 18, 2024 ... The current ratio, sometimes referred to as the working capital ratio, is a metric used to measure a company's ability to pay its short-term liabilities. Apr 18, 2024 ... The current ratio is a measure of a company's near-term liquidity position, or more specifically, the short-term obligations coming due within one year.