Current ratio

Answer 1

The current ratio is a financial ratio that measures a company's ability to pay its short-term obligations with its current assets. It is calculated by dividing a company's current assets by its current liabilities. The current ratio indicates whether a company has enough short-term assets to cover its short-term liabilities. A healthy current ratio is usually considered to be around 2:1, which means that the company's current assets are twice its current liabilities. A current ratio below 1 indicates that a company may have difficulty in meeting its current obligations.