| The Current Ratio is a financial metric used to assess a company’s ability to meet its short-term liabilities with its short-term assets. It is a measure of liquidity, indicating how well a company can cover its debts due within a year using assets like cash, inventory, and receivables. A higher current ratio suggests better liquidity and financial health, while a low ratio may indicate potential difficulties in meeting obligations. However, an excessively high ratio can suggest inefficient use of assets. |
