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What Is the Current Ratio?
Formula
The current ratio measures a company's ability to pay short-term obligations due within one year.
A ratio above 1.0 means the company has more current assets than liabilities, indicating good liquidity.
Common use cases:
- Assessing company liquidity
- Credit analysis
- Financial health checks
Frequently Asked Questions
Dr. David Park
Applied Mathematician, PhD Mathematics
David holds a PhD in Applied Mathematics from MIT. He has published research on numerical methods and computational algorithms used in engineering and scientific calculators.
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