How it works
Current ratio = current assets / current liabilities at the same balance-sheet date.
Input definitions
- Current assets
- Enter the value in the labeled unit.
- Current liabilities
- Enter the value in the labeled unit.
A worked example
- Current assets
- 150000
- Current liabilities
- 100000
Assumptions & limits
Uses the accounting classifications, periods and policies you enter. Illustrative management-accounting model; it is not an audited statement, filing or determination of local accounting or tax compliance.
Sources & review
Maintained by AnsRio. Methods and examples use automated checks; this does not imply independent professional certification.
Method updated 2026-10-18. Content checked against the stated method and examples. Our verification approach.
Common questions
Does a higher current ratio always mean better liquidity?
No. Receivables may be uncollectible and stock slow-moving. Review asset quality and payment timing as well as the ratio.
How does Current ratio work?
Current ratio = current assets / current liabilities at the same balance-sheet date.
What should I check before using Current ratio?
Uses the accounting classifications, periods and policies you enter. Illustrative management-accounting model; it is not an audited statement, filing or determination of local accounting or tax compliance.