Current ratio: Comparing Current Assets with Current Obligations
The current ratio compares assets classified as current with current liabilities. It is a broad balance-sheet liquidity measure rather than a cash forecast.
Use the Current ratio Calculator to enter your own figures and compare the result with the worked example below.
Current ratio formula
Current ratio = Current assets ÷ Current liabilities
Worked example
| Item | Example value |
|---|---|
| Current assets | 100000 USD |
| Current liabilities | 50000 USD |
| Current ratio | 2 |
These are illustrative inputs, not current prices, rates or recommended targets. Where a currency is shown, keep all comparable money amounts in the same currency; conversion examples identify the two sides separately.
How to interpret the result
Inventory may not sell quickly and receivables may not arrive on time. Review the composition and timing behind the total.
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Method and further reading
The example follows the FinMathly calculator method. For broader background, see SEC: Understanding financial statements. The background resource may use jurisdiction-specific terms; it does not replace the assumptions of this calculator.
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