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Current ratio |
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Current ratioIndicator of short-term debt-paying ability. Determined by dividing current assets by current liabilities. The higher the ratio, the more liquid the company.Current ratioA financial ratio which shows how easily the company could pay its bills if all its creditors demanded payment at once. Calculated as: (current assets) divided by (current liabilities)In theory this figure should be at least 1, because if it's lower than 1 it means that the company does not have the liquidity to pay all its creditors straight away. That said, some companies, notably supermarkets, happily survive on current ratios of less than 0.5.As always, it's best to compare the ratio of one company with others in its sector. Over 1.5 suggests excessive caution on the part of management.For a more stringent version of the current ratio, see 'acid test'.Similar MatchesCurrent accountCurrent accountA bank account which offers a number of facilities including cheque book for debt settlement, deposits, direct debits and where applicable, overdrafts. This type of account is normally used for ongoing transactions (for example monthly direct debits and writing of cheques etc.) as opposed to a deposit account.A balance of payments account listing transactions other than capital movement.An account listing transactions between trading companies. Net current assetsNet current assetsThe difference between current assets and current liabilities, also known as working capital. Current assetsCurrent assetsAssets of a company which are regularly turned over including cash, work in progress and debtors. Current incomeCurrent incomeMoney that is routinely received from investments in the form of dividends, interest, and other income sources. Current account surplusCurrent account surplusCredits minus debits on current account. Same as balance on current account. See surplus. Further SuggestionsCurrent income bondscurrent liabilities Current account deficit Current account Noncurrent liability Spontaneous Current Liabilities Noncurrent asset Other current assets Current yield Permanent spontaneous current Liabilities Current prices Current maturity High current income mutual fund current cost accounting Current liabilities Current coupon issues Current assets Current issue Current rate method current income Balance on current account Current production rate high current income fund Current coupon Permanent Current Assets |
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