Comments on: What financial information does the current ratio measure? http://financedeal.info/what-financial-information-does-the-current-ratio-measure/28/ What Finance Deal? Get the Latest Scoop Here. Fri, 18 Nov 2011 10:25:10 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: dreygo64 http://financedeal.info/what-financial-information-does-the-current-ratio-measure/28/comment-page-1/#comment-30 dreygo64 Thu, 20 Nov 2008 01:30:43 +0000 http://financedeal.info/what-financial-information-does-the-current-ratio-measure/28/#comment-30 Current ratio is equal to current assets divided by current liabilities. If the current assets of a company are more than twice the current liabilities, then that company is generally considered to have good short-term financial strength. If current liabilities exceed current assets, then the company may have problems meeting its short-term obligations. This ratio is considered one of the indicators of the ability to pay bills in a timely fashion, though it is not the only measure. “Current” is the descriptive used for short turnaround assets and liabilities. Accounts receivable and payable…inventory…cash on hand are all examples of items that would be used in the current ratio. Current ratio is equal to current assets divided by current liabilities. If the current assets of a company are more than twice the current liabilities, then that company is generally considered to have good short-term financial strength. If current liabilities exceed current assets, then the company may have problems meeting its short-term obligations. This ratio is considered one of the indicators of the ability to pay bills in a timely fashion, though it is not the only measure.

“Current” is the descriptive used for short turnaround assets and liabilities. Accounts receivable and payable…inventory…cash on hand are all examples of items that would be used in the current ratio.

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