Current Ratio | Web Scraping Tool | ScrapeStorm
Abstract:Current Ratio, also known as the working capital ratio or real ratio, is an important financial indicator to measure a company's short-term debt repayment ability. ScrapeStormFree Download
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Introduction
Current Ratio, also known as the working capital ratio or real ratio, is an important financial indicator to measure a company’s short-term debt repayment ability. It represents the ratio between a company’s current assets and current liabilities. By comparing a company’s current assets and current liabilities, it assesses whether the company has sufficient funds to pay its short-term debts. The calculation formula for the current ratio is: Current ratio = Current assets ÷ Current liabilities.
Applicable Scene
The current ratio is one of the main indicators to measure a company’s short-term debt repayment ability. By comparing current assets and current liabilities, it can be assessed whether a company has sufficient funds to pay its debts in the short term.
Pros: The current ratio can reveal the extent to which a company uses current assets to offset current liabilities, thereby evaluating the company’s short-term debt repayment ability. The current ratio is a relative number that is not affected by the size of the company, so it is more suitable for comparisons with peers and comparisons of different periods of the company.
Cons: The current ratio reflects the ratio of the current assets available to a company at a certain point in time to its current liabilities, and such static assets are not necessarily related to future cash flows. Therefore, the current ratio cannot be used to assess the liquidity of a company’s future funds.
Legend
1. Current Ratio.
2. Current Ratio Formula.
Related Article
Reference Link
https://www.investopedia.com/terms/c/currentratio.asp
https://en.wikipedia.org/wiki/Current_ratio
https://corporatefinanceinstitute.com/resources/accounting/current-ratio-formula/