Current ratio is a measure of liquidity, which compares a company's current assets with its current liabilities. Current ratio is a favored test among banks and lenders because it reveals whether a ...

There’s no universal safe or danger level. Ideal current ratios vary by industry. A current ratio of 1.0 means the company has $1 in current assets for every $1 in current liabilities. A ratio below 1 ...

One of the many metrics that investors use when evaluating a company is return on assets. The greater the return a company can achieve using a given amount of capital, the higher the valuation that ...

Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past ...

A current ratio is an accounting formula that defines a company's ability to meet its immediate and short-term obligations. The current ratio, sometimes called the liquidity ratio or the working ...

Financial ratios are calculations that compare two (or more) pieces of financial data that are normally found in a company's financial statements. Ratios can be invaluable to investors making ...

When you’re evaluating a potential investment, you likely look at profitability and growth, but there is one fundamental concept you must master first: liquidity. Just as a household needs enough cash ...

A fundamental flaw in U.S. GAAP and IFRS financial reporting standards distorts the calculation of working capital and the current ratio, resulting in a significant understatement in most companies’ ...