Difference between revisions of "Current ratio"
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Revision as of 11:01, 20 December 2018
Current ratio is a liquidity ratio; current assets are divided by current liabilities to indicate a company's ability to pay its short-term debt. This ratio does not provide as much certainty as the acid test ratio.
Definitions
According to College Accounting: A Practical Approach by Slater (13th edition),
- Current ratio. A liquidity ratio; current assets are divided by current liabilities to indicate a company's ability to pay its short-term debt. This ratio does not provide as much certainty as the acid test ratio.
Related concepts
- Accounting (alternatively known as accountancy) is management of financial data, information, and knowledge about financial transactions of legal entities. Accountancy tends to include bookkeeping and, depending on a particilar enterprise, may also include quatitative analysis of financial data in the bookkeeping system and/or business intelligence.
