Current Ratio
Current ratio = Current Assets / Current Liabilities. Liquidity benchmark.
Result
Current ratio
2.000
Strong (≥2)
- Current assets$400
- Current liabilities$200
- Current ratio2.0000
- Working capital$200
- TierStrong (≥2)
Step-by-step
- Current ratio = 400 / 200 = 2.000.
- Working capital = 400 − 200 = $200.
How to use this calculator
- From balance sheet: current assets / current liabilities.
- Compare to industry peers + history.
About this calculator
Current ratio measures short-term liquidity: can the company pay obligations due within 12 months? Above 2.0 is strong; 1.5-2.0 healthy; 1.0-1.5 adequate; below 1.0 risk of cash crunch. Industry varies — retailers run 1.0-1.5 normally (fast inventory turn); manufacturers 1.5-2.5. Current ratio includes inventory; quick ratio excludes (more conservative).
Frequently asked
Within 12 months. Includes cash, AR, inventory, prepaid expenses (assets); AP, short-term debt, current portion long-term debt (liabilities).
Related calculators
Quick Ratio (Acid Test)
(Current assets − Inventory) / Current liabilities. Stricter than current ratio.
Debt-to-Equity Ratio
D/E = Total Debt / Total Equity. Leverage relative to ownership.
Return on Equity (ROE)
ROE = Net Income / Avg Shareholders' Equity. Profitability per dollar of equity.
Return on Assets (ROA)
ROA = Net Income / Avg Total Assets. Profitability per dollar of all assets.
EBITDA Calculator
EBITDA = Net Income + Interest + Tax + D&A. Operating earnings before financing + non-cash items.
Free Cash Flow (FCF)
FCF = EBIT(1−T) + D&A − CapEx − ΔNWC. Cash available to all capital providers.