Current Ratio

The Current Ratio is a financial ratio that provides information about a company’s liquidity. These ratios are sometimes referred to as liquidity measures. Liquidity measures a company’s ability to pay its bills over the short run without undue stress. The current ratio equation is: Current assets divided by current liablities.

 {\displaystyle {\mbox{Current ratio}}={\frac {\mbox{Current Assets}}{\mbox{Current Liabilities}}}}

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