The meaning of CURRENT RATIO is the ratio between current assets and liabilities used in appraising credit worthiness of a business.
The meaning of CURRENT RATIO is the ratio between current assets and liabilities used in appraising credit worthiness of a business.
lenders, banks, investors, etc. The current ratio indicates the ability of a company to generate cash fromcurrent assetsto paycurrent liabilities, which become due in the short term. It is simple but provides
The ratio of current assets to current liabilities. This ratio is an indicator of a company’s ability to meet its current obligations. To learn more, seeExplanation of Financial Ratios. Related Q&A What is the current ratio? What is the difference between the current ratio and the acid test...
Generally, a ratio of 1.5 - 2.0 is considered a normal and acceptable value, meaning that the company has $1.50 to $2.00 of current assets to cover each dollar of current liability. A high current ratio may indicate that the company is not efficiently managing its current assets, while a ...
Thebest long-term investmentsmanage their cash effectively, meaning they keep the right amount of cash on hand for the needs of the business. What is a bad current ratio? A current ratio below 1.0 suggests that a company’s liabilities due in a year or less are greater than its assets. ...
Current ratio = 60 million / 30 million = 2.0x The business currently has a current ratio of 2, meaning it can easily settle each dollar on loan or accounts payable twice. A rate of more than 1 suggests financial well-being for the company. There is no upper end on what is “too mu...
The current ratio for Food and hangout outlets is 2, meaning they have enough assets to pay back their current liabilities. It shows that the Food & Hangout outlet’s business is less leveraged and has negligible risk. Banks always prefer a current ratio of more than 1, so the current ass...
The meaning of CURRENT RIPPLE is an asymmetrical ripple mark formed by currents of water on the surface of sediments (as river bars, tidal flats, beaches, or sand dunes).
In this example, the trend for Company B is negative, meaning the current ratio is decreasing over time. An analyst or investor seeing these numbers would need to investigate further to see what is causing the negative trend. It could be a sign that the company is taking on too much debt...