The Current Ratio (aka Liquidity Ratio) calculator computes the current ratio that measures the ability of a company to pay short-term liabilities.
INSTRUCTIONS: Choose units and enter the following:
- (A) This is the Current Assets
- (L) This is the Current Liabilities
Current Ration (CR): The calculator returns the ratio as a real number. However, this can be automatically converted to a percentage via the pull-down menu.
Description
The current ratio is a financial metric used to evaluate a company's liquidity or working capital position. The metric ratio represents liquidity as the proportion of current assets available to cover current liabilities. The formula for Current or Liquidity Ration is:
Current Ratio = Current Assets / Current Liabilities
The ratio represents whether a company's short-term assets (cash, cash equivalents, marketable securities, accounts receivables and inventory) are capable of paying-off its short-term liabilities (notes payable, current portion of term debt, accounts payable, accrued expenses and taxes)
The greater the ratio's value, the healthier is the company's position.
Financial Calculators
Also consider the following finance and accounting equations and calculators:
- Net Cash flow from Operation
- Current Ratio or Liquidity Ratio
- Capital Recovery Factor
- Annual Percentage Yield
- Simple interest Earned
- Debt to Equity Ratio
- Compound interest Future Value
- Personal Finace
- Microeconomics Calculator
- Annualized Amortization
- Credit Card Equation
- Leverage Ratio
- Cash Flow
- Compound Interest
- CAGR
- Present Value
- Future Value
- Rule of 72
- Simple Interest Earned