The current ratio is calculated by dividing a company’s current assets by its current liabilities. Ratios of 1 or higher indicate short-term solvency.

These are examples of assets not normally easily disposed of. Key Takeaway: Formally, if an asset isn't expected to be cashable within a year, it isn’t considered a current asset. In business, a ...

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Company balance sheets show the long-term financial health of the company, if investors know where to look. The current ratio is a measure of liquidity that lets investors know if a company can or ...