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.

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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 ...

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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 ...

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 ...