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    Current Ratios

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    Balaji Gajendran
    The document discusses the current ratio, which is a measure of a firm's short-term liquidity calculated by dividing its current assets by its current liabilities. It represents the firm's ability to pay off its current liabilities with its current assets and is an important indicator of the firm's short-term financial health and ability to meet upcoming obligations.

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    Current Ratios

    Uploaded by

    Balaji Gajendran
    17 views1 page
    The document discusses the current ratio, which is a measure of a firm's short-term liquidity calculated by dividing its current assets by its current liabilities. It represents the firm's ability to pay off its current liabilities with its current assets and is an important indicator of the firm's short-term financial health and ability to meet upcoming obligations.

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    The document discusses the current ratio, which is a measure of a firm's short-term liquidity calculated by dividing its current assets by its current liabilities. It represents the firm's ability to pay off its current liabilities with its current assets and is an important indicator of the firm's short-term financial health and ability to meet upcoming obligations.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    17 views1 page

    Current Ratios

    Uploaded by

    Balaji Gajendran
    The document discusses the current ratio, which is a measure of a firm's short-term liquidity calculated by dividing its current assets by its current liabilities. It represents the firm's ability to pay off its current liabilities with its current assets and is an important indicator of the firm's short-term financial health and ability to meet upcoming obligations.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    Download as docx, pdf, or txt
    of 1

    CURRENT RATIO

    It is a measure of general liquidity and is most widely used to make the


    analysis for short term financial position or liquidity of a firm. It is calculated
    by dividing the total of the current assets by total of the current liabilities.

    DEFINITION
    Current ratio may be defined as the relationship between current assets
    and current liabilities. This ratio is also known as “working capital ratio“. It is a
    measure of general liquidity and is most widely used to make the analysis for
    short term financial position or liquidity of a firm. It is calculated by dividing
    the total of the current assets by total of the current liabilities.

    FORMULA
    Current Ratio = Current Assets / Current Liabilities
    Or
    Current Assets : Current Liabilities

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