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Example of the Current Ratio Formula. If a business holds: Current assets = 15 + 20 + 25 = 60 million. Current liabilities = 15 + 15 = 30 million. Current ratio = 60 million / 30 million = 2.0x. The business currently has a current ratio of 2, meaning it can easily settle each dollar on loan or accounts payable twice.
Feb 9, 2024 · The value of the current ratio is calculated by dividing current assets by current liabilities. More precisely, the general formula for the current ratio is: current_ratio = current assets / current_liabilities. Note that the value of the current ratio is stated in numeric format, not in percentage points. You can obtain the exact values of ...
Apr 3, 2024 · You’ll find the current ratio with other liquidity ratios. General Electric’s (GE) current assets in December 2021 were $65.5 billion; its current liabilities were $51.95 billion, making its ...
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You calculate the current ratio by dividing your company’s current assets by your current liabilities, i.e.: Current ratio = total current assets / total current liabilities. Let’s imagine that your fictional company, XYZ Inc., has $15,000 in current assets and $22,000 in current liabilities. Its current ratio would be:
Jul 11, 2023 · Current ratio = Current assets/Current liabilities = $1,100,000/$400,000 = 2.75 times. The current ratio is 2.75 which means the company’s currents assets are 2.75 times more than its current liabilities. Significance and interpretation. Current ratio is a useful test of the short-term-debt paying ability of any business.
Jun 8, 2023 · Expressed as a Number. This is arrived at by dividing current assets by current liabilities. For example, if a company's total current assets are $90,000 and its current liabilities are $72,000, its current ratio is $90,000/$72,000 = 1.25. If the current ratio of a business is 1 or more, it means it has more current assets than current ...
Jul 24, 2020 · The current ratio is calculated by dividing a company's current assets by its current liabilities. The higher the resulting figure, the more short-term liquidity the company has. A current ratio of less than 1 could be an indicator the company will be unable to pay its current liabilities.
