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.
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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
TV = True Value
OV = Observed Value
To calculate the dividend payout ratio, you can use our Dividend Payout, Ratio Calculator.
If a business holds current assets of 70 million and current liabilities of 35 million then find the current ratio of the business.
Current assets = 70 million
Current liabilities = 35 million
Current Ratio = ?
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.
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.