Quickly assess your company's short-term financial health with this easy-to-use calculator. Simply enter your current assets and liabilities to:
- Calculate your current ratio instantly
- Understand what the ratio means for your business
- Evaluate your liquidity position
- Make informed decisions about financial management
Perfect for business owners, accountants, and financial analysts. They need to oversee liquidity and guarantee the company can meet its short-term obligations.
🔹 Simple & Precise
🔹 Immediate Interpretation
🔹 Educational Resources Included
🔹 Mobile-Friendly Design
Check your financial health now and maintain optimal liquidity for business success!
Current Ratio Calculator
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Current Ratio:
What is Current Ratio?
The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year. It compares a firm's current assets to its current liabilities.
How to Calculate Current Ratio
The formula for current ratio is:
Current Ratio = Current Assets ÷ Current Liabilities
Where:
- Current Assets include cash, accounts receivable, inventory, and other assets expected to be converted to cash within a year
- Current Liabilities include accounts payable, short-term debt, and other obligations due within a year
Interpretation of Current Ratio
- Above 2.0: Excellent short-term financial health (may indicate excess idle assets)
- 1.5 - 2.0: Good financial position
- 1.0 - 1.5: Adequate but could be improved
- Below 1.0: Potential liquidity problems (may struggle to pay short-term debts)
Example Calculation
If a company has:
- Current Assets = $500,000
- Current Liabilities = $250,000
Current Ratio = $500,000 ÷ $250,000 = 2.0
This indicates the company has $2 in current assets for every $1 of current liabilities.
