Phrases with «current ratio»

The phrase "current ratio" refers to a financial ratio that shows the ability of a company to cover its short-term obligations or debts using its short-term assets. It is calculated by dividing current assets (such as cash, accounts receivable, and inventory) by current liabilities (such as accounts payable and short-term loans). The higher the current ratio, the better the company's ability to pay off its debts in the near future. Full definition

Related phrases

Sentences with «current ratio»

  • In some industries, current ratio of lower than 1 might also be considered acceptable. (accounting-simplified.com)
  • In short, a high current ratio means the company got more cash coming in than out. (dhandho.dk)
  • Businesses must analyze their working capital requirements and the level of risk they are willing to accept when determining the target current ratio for their organization. (accounting-simplified.com)
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