Glory Current Ratio Calculation
Current ratio is computed by dividing total current assets by total current liabilities of the business.
Current ratio calculation. In the above formula the current ratio is derived by dividing current assets by current liabilities. For example in 2011 Current Assets was 4402 million and Current Liability was 3716 million. Now lets know What is a Current Ratio.
Going through the definition of the current ratio which is all about how much current assets are available to meet the companys short-term debt current liabilities you arrive the following formula to calculate the current ratio. The current ratio is very similar to the quick ratio which you can calculate using our Quick Ratio Calculator. To calculate the ratio analysts compare a companys current assets to its current liabilities.
Working capital generally refers to the money a company has on hand for everyday operations and is calculated by subtracting current liabilities from current assets. Above formula comprises of two components ie current assets and current liabilities. In other words it is the tool used to assess whether current assets could pay off current liability or not.
Current ratio is a comparison of current assets to current liabilities calculated by dividing your current assets by your current liabilities. The current ratio is a liquidity ratio that measures a companys ability to pay short-term obligations. Heres the Current Ratio formula.
44023716 118x Likewise we calculate the Current Ratio for all other years. A rate of more than 1 suggests financial well-being for the company. The resulting number is the number of times the company could pay its current obligations with its current assets.
The Current Ratio is one of the Liquidity Ratios use to assess an entitys liquidity position by using the relationship between Current Assets and Current Liabilities. Current assets listed on a companys balance sheet include cash accounts receivable inventory and. The current ratio is a very common financial ratio to measure liquidity.