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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 account deficitCurrent account deficitDebits minus credits on current account. See deficit. Noncurrent assetNoncurrent assetAny asset that is expected to be held for the whole year, not sold or exchanged, such as real estate, machinery, or a patent. High current income mutual fundHigh current income mutual fundA mutual fund whose primary goal is to produce a high level of income by making higher-risk investments in instruments such as junk bonds. Current income bondsCurrent income bondsBonds paying semiannual interest to holders. Interest is not included in the accrued discount. Current liabilitiesCurrent liabilitiesDebts owed by a company which are due for settlement within 12 months. These include creditors and taxes due etc. Further SuggestionsCurrent account balanceCurrent yield Current account surplus Current income Noncurrent liability current income Current account Current assets Current rate method Current coupon issues Current issue current cost accounting Balance on current account high current income fund Current prices Net current assets Current liabilities Current production rate Current maturity Spontaneous Current Liabilities Other current assets Current account Current coupon Permanent Current Assets Permanent spontaneous current Liabilities |
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