The current ratio is a liquidity ratio that measures a company’s ability to pay short-term obligations or those due within one year. It tells investors and analysts how a company can maximize ...

These ratios generally fall within one of four types of measurements: profitability, liquidity, solvency, and valuation. Understanding and applying ratios from all of these categories can enable ...

While the current ratio offers investors a convenient way to compare the short-term liquidity of various companies they are considering investing in, it doesn’t always give an accurate picture ...