Current Ratio Calculator
Measure a company’s short-term liquidity and financial health instantly. Our professional-grade calculator helps investors, analysts, and business owners evaluate the ability to meet current obligations with current assets.
Interactive Current Ratio Calculator
Calculate current ratio instantly with step-by-step explanations and visual charts. Professional tool for financial analysis and business health assessment.
Current Ratio Formula
Current Ratio Definition
The current ratio is calculated by dividing current assets by current liabilities:
Interpretation Guide
- Current Ratio > 1: Company has more current assets than liabilities, suggesting good short-term financial health
- Current Ratio = 1: Equal current assets and liabilities
- Current Ratio < 1: More liabilities than assets, may indicate potential liquidity problems
A healthy current ratio is typically between 1.2 and 2.0, indicating sufficient liquid assets to cover short-term obligations.
How to Use the Calculator
Simple steps for accurate financial analysis
Enter Current Assets
Input total current assets from your balance sheet (cash, receivables, inventory, etc.)
Enter Current Liabilities
Input total current liabilities (payables, short-term debt, accrued expenses)
Get Instant Analysis
View your current ratio with professional interpretation and visual charts
Frequently Asked Questions
The current ratio is a liquidity ratio that measures a company’s ability to pay short-term obligations (due within one year) with its short-term assets. It compares current assets to current liabilities.
A healthy current ratio is typically between 1.2 and 2.0. Ratio above 1 indicates more assets than liabilities. Ratio below 1 suggests potential liquidity problems. Ratio above 2 may indicate inefficient asset use.
Current assets include cash, cash equivalents, short-term investments, accounts receivable, inventory, and other assets convertible within one year. Current liabilities include short-term debt, accounts payable, accrued liabilities, and obligations due within one year.
Limitations include: doesn’t consider cash flow timing, can be manipulated near reporting periods, industry standards vary. The quick ratio (excluding inventory) is a more stringent liquidity measure.
The current ratio includes all current assets. The quick ratio (acid-test) excludes inventory, focusing only on assets that can be quickly converted to cash. Quick ratio is a more conservative liquidity measure.
No questions found
Try searching with different keywords or browse all questions above.