The current ratio assess a company’s ability to pay its short-term (current) liabilities, by comparing them to its short-term (current) assets.
In general, a higher current ratio is better than a lower one. Some investors prefer companies with a current ratio above 1, though it can depend on the industry.
Beginner’s Guide to Total Current Assets
You can use total current assets to assess a company’s financial standing. Today’s post will teach us the formulas to use and what to do
Simple Balance Sheet Structure Breakdown (by Each Component)
“Never invest in a company without understanding its finances. The biggest losses in stocks come from companies with poor balance sheets.” Peter Lynch The ability
Working Capital vs Current Ratio – Don’t Calculate WC the Wrong Way!
There’s a subtle difference between working capital and current ratio. Though both can be calculated from the same place in the balance sheet, they are
Why Liquidity Ratios Are Important, With Examples Using Real Companies
In times of financial uncertainty, finding companies with a good amount of liquidity provides a margin of safety. Companies in good shape regarding liquidity can
How the Working Capital Turnover Ratio Can Help You Decide on a Worthy Investment
“Over the long term, it’s hard for a stock to earn a much better return than the business which underlies it earns. If the business
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