Current Ratio
Whether a company has enough short-term assets to cover its short-term bills.
What it is
The current ratio is a liquidity measure that compares current assets (cash, receivables, inventory, and other items expected to convert to cash within a year) against current liabilities (bills due within a year). A ratio of 2 means the company has two dollars of short-term assets for every dollar of short-term obligations. It answers whether near-term debts can be met without raising new financing.
Why it matters
It is a quick check on short-term financial health and the risk of a cash crunch. A ratio below 1 means current liabilities exceed current assets, which can signal liquidity pressure, while a very high ratio may mean cash or inventory is sitting idle. Because it includes inventory, which can be slow to sell, it is a looser test than the quick ratio.
How it's calculated
Divide total current assets by total current liabilities, both from the balance sheet.
How Quintarthai uses it
The current ratio is listed in the Liquidity group of the Ratios tab on a company's deep-analysis page, and you can screen the North-American universe by it in the Stock Screener.