Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

"The current ratio is simply current assets divided by current liabilities. A higher ratio indicates a higher level of liquidity," says Robert Johnson, a CFA and professor of finance at Creighton ...

It represents a company’s liquidity, operational efficiency, and short-term financial health. Subtract a company’s current liabilities from its current assets to calculate working capital.

Accounting liquidity refers to the amount of ready money a company has on hand; investors use it to gauge a firm's financial health. In finance, the current market value of an asset isn't the only ...