Claire Boyte-White is the lead writer for NapkinFinance.com, co-author of I Am Net Worthy, and an Investopedia contributor. Claire's expertise lies in corporate finance & accounting, mutual funds, ...

There’s no universal safe or danger level. Ideal current ratios vary by industry. A current ratio of 1.0 means the company has $1 in current assets for every $1 in current liabilities. A ratio below 1 ...

Current ratio is a measure of liquidity, which compares a company's current assets with its current liabilities. Current ratio is a favored test among banks and lenders because it reveals whether a ...

Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past ...

A current ratio is an accounting formula that defines a company's ability to meet its immediate and short-term obligations. The current ratio, sometimes called the liquidity ratio or the working ...

When you’re evaluating a potential investment, you likely look at profitability and growth, but there is one fundamental concept you must master first: liquidity. Just as a household needs enough cash ...

A fundamental flaw in U.S. GAAP and IFRS financial reporting standards distorts the calculation of working capital and the current ratio, resulting in a significant understatement in most companies’ ...

Financial ratios are calculations that compare two (or more) pieces of financial data that are normally found in a company's financial statements. Ratios can be invaluable to investors making ...

Understanding working capital as a small business owner can help you grow your business or take advantage of bigger opportunities.