Current ratio measures short-term asset coverage of liabilities, guiding investment decisions. Compare a company's current ratio across years and versus peers to assess financial health. Seasonal ...

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.

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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