What is Current Ratio?
The Current Ratio measures whether a company has enough liquid assets to cover obligations due within a year. A ratio above 1.5 is generally healthy; below 1 suggests potential liquidity stress. It's a quick read on short-term solvency.
Formula
Current Ratio = Current Assets ÷ Current Liabilities
How TopTier Strategy uses Current Ratio
We screen current ratio in the Financial Health pillar to flag companies running tight on near-term liquidity.
Related Glossary Terms
Other concepts in the Financial Health pillar.
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