The current ratio is a liquidity ratio that measures a company’s ability to cover its short-term obligations with its current assets. Learn how it is used.

Reviewed by David Kindness The debt service coverage ratio (DSCR) is used in corporate finance to measure the amount of a ...

Learn about the current ratio, a fundamental financial metric that measures a company's ability to pay off its short-term liabilities with its short-term assets.

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.

Ratios like the acid test and current ratio help determine a firm's liquidity. Solvency, although related, refers to a company's ability to instead meet its long-term debts and other such obligations.

Excel Maritime Carriers' ratio in this category is a bit shaky, currently standing at 0.7. We look for current ratios greater than 1, meaning that a company could use its current assets to ...