The current ratio is calculated by dividing a company’s current assets by its current liabilities. Ratios of 1 or higher indicate short-term solvency.

Also known as liquidity ratios, liquid ratios measure how well a firm can use its short-term assets to meet its short-term debt obligations. Business managers can use several different liquidity ...

Liquidity ratios assess if a company can cover short-term debts with available assets. Key ratios include cash, quick, current, and operating cash flow ratios. A liquidity ratio over 1 suggests a ...

There’s no universal safe or danger level. Ideal current ratios vary by industry. A current ratio of 1.0 means the company has $1 in current assets for every $1 in current liabilities. A ratio below 1 ...

When you’re evaluating a potential investment, you likely look at profitability and growth, but there is one fundamental concept you must master first: liquidity. Just as a household needs enough cash ...

A current ratio is an accounting formula that defines a company's ability to meet its immediate and short-term obligations. The current ratio, sometimes called the liquidity ratio or the working ...

Sound financial management is necessary in a small business -- to make the most of your assets, you need to properly account for them. The quick ratio is a simple financial ratio that can help you to ...

The quick ratio, also known as the acid-test ratio, measures a company's ability to pay off its current debt. Current debt includes any liabilities coming due within a year, like accounts payable and ...

These are examples of assets not normally easily disposed of. Key Takeaway: Formally, if an asset isn't expected to be cashable within a year, it isn’t considered a current asset. In business, a ...