Calculate current ratio, quick ratio, and cash ratio to assess your company's ability to pay short-term obligations. Includes industry benchmarks and financial health analysis.
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The current ratio is one of the most fundamental measures of a company's financial health, showing whether a business can pay its short-term debts with its short-term assets. Investors, creditors, and business owners use this ratio to quickly assess liquidity risk. Our calculator goes beyond the basic current ratio to provide quick ratio, cash ratio, and working capital analysis—giving you a complete picture of financial stability.
The current ratio measures a company's ability to pay off its short-term obligations (due within one year) using its short-term assets. A ratio above 1.0 means the company has more current assets than current liabilities—generally a sign of good financial health. However, the 'ideal' ratio varies significantly by industry: retail businesses often operate successfully with ratios around 1.2-1.5, while manufacturing companies may need 2.0 or higher due to slower inventory turnover. The quick ratio (acid-test ratio) is more conservative, excluding inventory from current assets, while the cash ratio only considers cash and cash equivalents—the most liquid assets.
Current Ratio Formula
Current Ratio = Current Assets / Current LiabilitiesGet current ratio, quick ratio, and cash ratio in one calculation—three different perspectives on your company's ability to meet short-term obligations.
Compare your ratios against industry averages for technology, retail, manufacturing, healthcare, and more to see where you stand relative to peers.
Use simple mode for quick calculations with totals, or detailed mode to input individual asset and liability items for more accurate analysis.
See your asset and liability composition through charts, helping identify which components most impact your liquidity position.
Get color-coded health status and plain-English explanation of what your ratios mean for your business's financial stability.
Use presets to quickly model different financial scenarios and see how changes in assets or liabilities affect your liquidity ratios.
Banks and lenders evaluate current ratio when approving business loans. Calculate yours before applying to know where you stand and improve if needed.
Investors analyze liquidity ratios to assess a company's short-term financial stability. Use this calculator to prepare for investor meetings.
Track your current ratio over time to identify trends. A declining ratio may signal cash flow problems before they become critical.
Suppliers often check liquidity ratios before extending trade credit. Know your ratios to negotiate better payment terms.
Liquidity analysis is essential in business valuations for M&A, partnerships, or selling your business.
A current ratio between 1.5 and 2.0 is generally considered healthy for most industries. However, 'good' varies by sector: retail (1.2-1.5), manufacturing (1.5-2.5), technology (2.0-3.0). A ratio below 1.0 indicates the company may struggle to pay short-term debts, while above 3.0 may suggest inefficient use of assets.