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 ...

See how we rate investing products to write unbiased product reviews. The current ratio measures a company's capacity to pay its short-term liabilities due in one year. The current ratio weighs a ...

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.

The quick ratio compares the value of a company's most liquid assets to the value of its current liabilities so investors can get a sense of how well it can cover its expenses in the short term.