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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 accountNet flow of goods, services, and unilateral transactions (gifts) between countries. Current pricesCurrent pricesRefers to prices in the present, rather than in some base year; e.g., "GDP at current prices" means GDP as measured, in contrast to real GDP, or "GDP at XXXX prices," where the latter is measured in the prices of year XXXX. Current couponCurrent couponA bond selling at or close to par, that is, a bond with a coupon close to the yields currently offered on new bonds of a similar maturity and credit risk. Current liabilitiesCurrent liabilitiesDebts owed by a company which are due for settlement within 12 months. These include creditors and taxes due etc. Balance on current accountBalance on current accountA country's receipts minus payments for current account transactions. Equals the balance of trade plus net inflows of transfer payments. Further SuggestionsOther current assetsCurrent issue Current liabilities Current account deficit Current rate method Current yield Current account balance Current account surplus Noncurrent liability Current assets Current coupon issues High current income mutual fund current cost accounting current account Current account Net current assets Noncurrent asset current assets Permanent spontaneous current Liabilities Current maturity current income Spontaneous Current Liabilities Current income Permanent Current Assets Current production rate |
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