When determining a company's solvency 一 the ability to pay its short-term obligations using its current assets 一 you can use several accounting ratios. The current ratio is one of them.

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 ...

Investopedia / NoNo Flores An accounting ratio is a metric that compares one line item from a company's financial statements to another. Accounting ratios, an important subset of financial ratios ...

Charlene Rhinehart is a CPA , CFE, chair of an Illinois CPA Society committee, and has a degree in accounting ... ratio is a measurement of a company's ability to pay off its current debts with ...