Current Ratio Formula used by the investors to find the liquidity of the company and analyze how efficiently a company can pay off its current obligations.
If the result calculated by this formula is high it means that the company can easily make the current debt payments. The low result is not favourable for the company.
Current Ratio Formula can be calculated by dividing the current assets by the current liabilities. Instead of decimal format, numeric format stated by this formula.
Current Ratio = Current Assets/ Current Liabilities
Here you can also learn about the definition of Current Ratio.
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