# Current Ratio

The **current ratio is a popular metric** also known as a **liquidity ratio** or a **working capital ratio** is used to **measure the capability of a business**.

The current ratio is measured by dividing your current assets by your current liabilities. It is also used to measure a company's ability to pay current, or short-term, liabilities with its current, or short-term, assets.

**Table of Contents**

## Formula of Current Ratio Calculator

The given below current ratio formula can be used to easily find the company’s liquidity.

Current ratio = Current Assets / Current Liabilities

**Where,**

TV = True Value

OV = Observed Value

**Note:**

To calculate the dividend payout ratio, you can use our Dividend Payout, Ratio Calculator.

### Example

If a business holds current assets of 70 million and current liabilities of 35 million then find the current ratio of the business.

**Given data**

Current assets = 70 million

Current liabilities = 35 million

**To Find**

Current Ratio = ?

**Solution**

As we know the current ratio formula

Current ratio = current assets / current liabilities

Putting values in the formula:

Current Ratio = 70 / 35 = 2 million

### How to use Current Ratio Calculator?

The steps to use the current ratio calculator are as follows:

**Step 1: **Enter the value of current assets in the first required input.

**Step 2: **Enter the value of current liabilities in the second required input.

**Step 3: **The calculator will automatically display an answer on the screen.

### Calculator use

Our current ratio calculator is used to measure the company’s ability by dividing the current assets by current liabilities ever you can understand it easily with help of the formula, definition, and example given above our calculator.