Can I cover short-term liabilities?. The Current Ratio Calculator takes current assets, current liabilities and returns current ratio plus reading, working capital. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
Financial ratios are only useful in comparison: against last year, against a competitor, or against the benchmark for your industry. Take the figures from the same set of accounts, note whether they are yearly or monthly, and read each ratio alongside the others in its family. Use the worked example below to check the maths against your own figures.
How the Current Ratio Calculator works
The classic liquidity test: whether assets that turn into cash within a year cover the bills due within a year.
Worked example
With the example values (current assets of $500,000, current liabilities of $300,000), the current ratio is 1.67x; reading Between 1 and 2: generally healthy, working capital $200,000.00. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
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Frequently Asked Questions
How is current ratio calculated?
current ratio = current assets ÷ current liabilities.
Which figures do I need?
Current assets, current liabilities. Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
What is a good value for this ratio?
Benchmarks differ by industry, size and business model, so compare with companies like yours and with your own history. A ratio moving in the wrong direction for several periods matters more than any single number.
