definition of current ratio - MARKETS
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.
Understanding the Context
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 ... Investing: What is a Good Current Ratio?
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Key Insights
Understanding the Key Liquidity Benchmark A company needs to have enough liquidity to meet its short-term financial obligations or else it won't be successful. The current ratio is an accounting metric that provides one measure of liquidity. Publicly traded corporations are required to publish quarterly balance sheets that allow shareholders to compare a company’s assets with its liabilities. It’s also a good practice for private ... The meaning of DEFINITION is a statement of the meaning of a word or word group or a sign or symbol.
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How to use definition in a sentence. DEFINITION definition: the act of defining, or of making something definite, distinct, or clear. See examples of definition used in a sentence. DEFINITION meaning: 1. a statement that explains the meaning of a word or phrase: 2. a description of the features and….
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