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. Because the current ratio compares short-term ...

Creditors and investors may view a low current ratio as a red flag, potentially leading to higher borrowing costs, stricter loan terms, or reduced investor confidence. The definition of a good ...

The quick ratio compares the value of a company's most liquid assets to the value of its current liabilities so investors can get a sense of how well it can cover its expenses in the short term.