The role of the current ratio in financial analysis The current ratio is one tool you can use to analyze a company and its financial state. An interested investor might also want to look at other ...

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 ...

Internal analysis with liquidity ratios involves using multiple accounting periods that are reported using the same accounting methods. Comparing previous periods to current operations allows ...

David Kindness is a Certified Public Accountant (CPA) and an expert in the fields of financial accounting, corporate and individual tax planning and preparation, and investing and retirement planning.