Definition
Current Ratio
A quick check on whether a company can cover its short-term bills.
The current ratio divides a company’s current assets by its current liabilities — a simple test of whether it has enough near-term resources to cover what it owes within a year. A ratio comfortably above 1 suggests breathing room; well below 1 can signal liquidity strain. Market Lens uses the current ratio as one input to its Fortress Balance Sheet score, alongside debt levels and cash flow.
Related terms
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