What is the current ratio?

"A current ratio of 1.2 to 1 or higher generally provides a cushion. A current ratio that is lower than the industry average may indicate a higher risk of ... Mar 22, 2021 ... A current ratio of between 1.0-3.0 is pretty encouraging for a business. It suggests that the business has enough cash to be able to pay its ... Current assets that are divided by total current liabilities generate your current ratio, meaning it's the ratio that determines if your business has ... The current ratio is a liquidity measurement used to track how well a company may be able to meet its short-term debt obligations. It compares the ratio of ... Feb 11, 2025 ... Liquidity ratios provide insights into your company's short-term cash flow and ability to meet immediate obligations. Apr 11, 2022 ... Signal: Positive is better than negative; upward trend is good, 3 to 5 range is good, although over 5 may indicate that current assets may not ... Jun 27, 2024 ... Working capital is the difference between a company's current assets and current liabilities. The current ratio, calculated as current assets ... The current ratio, sometimes referred to as the 'working capital ratio', is a liquidity ratio that measures whether a business has enough resources to pay its ... This is a more sensitive, more narrowly defined, liquidity test than the current ratio. For instance, an agency might have current assets of cash, investments, ... Things to look out for why analysing your current ratio · A current ratio below 1 means that your company has more debt than liquid assets. · A current ratio of ...