The calculation of the current ratio is very simple. It is just a proportion of the current asset to current liabilities. Sometimes, these figures are readily available. But at times, we need to determine them using the company’s financial statements. Now, we discuss its formula: Formula Cu...
Definition: The current ratio is a financial ratio that measures a company’s ability to pay off its current obligations with current assets. Management and external users analyze this ratio to judge the liquidity of the company as well as its efficiency.What...
Current ratio = 60 million / 30 million = 2.0xThe 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 ...
流动比率(Current Ratio)用于评估企业短期偿债能力。其公式为: **流动资产 / 流动负债** - **选项A**:电流动资产除以流动负债,符合流动比率的定义,正确。 - **选项B**:总资产除以总负债,属于资产负债率或其他整体负债指标,与短期偿债无关。 - **选项C**:流动资产占总资产的比例,反映资产结构,并非偿债能力...
Current ratio formula: How to calculate current ratio The current ratio formula is a simple equation dividing current assets by current liabilities. As an equation, the current ratio formula is: Current ratio formula Current ratio = Current assets / Current liabilities There are three potential outco...
Current Ratio Formula The formula to calculate the current ratio divides a company’s current assets by its current liabilities. Current Ratio = Current Assets ÷ Current Liabilities Since the current ratio compares a company’s current assets to its current liabilities, the required inputs can be...
Current ratio, also known as liquidity ratio and working capital ratio, shows the proportion of current assets of a business in relation to its current liabilities. Formula Explanation Current ratio expresses the extent to which the current liabilities of a business (i.e. liabilities due to be ...
Current ratio Your current ratio is the ratio of current assets to current liabilities, which are debts you must pay off within the year. Luckily, this calculation doesn’t require advanced math. The formula for obtaining your current ratio is: Current Ratio = Current Assets / Current Liabilitie...
The formula is:Current ratio: Current assets / Current liabilities Sample current ratiosLet’s look at some examples of companies with high and low current ratios. You can find these numbers on a company’s balance sheet under total current assets and total current liabilities. Some finance ...
When we plug the relevant figures into the above formula, we end up with this: As you can see, the value of the current asset ratio in this case is less than 1, which is not a very inspiring result. It would be difficult for you to have confidence in Company B’s ability to pay...