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Current Ratio Calculator
Your current ratio, a comparison of current assets to current liabilities,
will be particularly important to you if you're thinking of borrowing
money or getting credit from one of your suppliers.
Potential creditors use this ratio to measure a company's liquidity or
ability to pay off short-term debts.
Though acceptable ratios may vary from industry to industry, a current
ratio of 2.00:1 is considered the norm.
The formula:
Current assets divided by current liabilities.
There's always a good reason to save money, whether you are trying to
buy a car, build a nest egg or travel to Tahiti. Enter your savings
goal below, and we'll calculate the amount you need to deposit each
month to get to your goal.
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How to use this calculator
You'll find the numbers you need to calculate your company's current
ratio on the balance sheet of your latest financial statement.
- Enter your total current assets.
- Enter your total current liabilities.
- Press "calculate."
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Now you know where you stand and have a basis for comparison with
previous years. Changes in a company's current ratio over a period
of years can point out problems and successes. A declining current
ratio could be pointing to financial problems. An improving ratio
could be the result of a brighter financial picture or an
overstocked warehouse (inventory is considered an asset). The key
here is to find out why a ratio has changed.
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