Current Ratio
Liquidity RatiosMeasures a company's ability to pay short-term obligations. Compares current assets to current liabilities.
Formula
Current Ratio = Current Assets / Current Liabilities
Why it matters
Ratio above 1 means company can cover short-term debts. Too high may indicate inefficient use of assets. Ideal: 1.5-2.5.
Indian example
Related terms
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