Definitions for "current ratio"
An indication of a companys ability to meet short-term debt obligations; the...
An accounting ratio, usually defined as current assets divided by creditors falling due within one year. The ratio is designed to assess the solvency of a company in the short term. If the current ratio exceeds one, then the value of current assets is greater than the value of the short term creditors, indicating that the company is able to pay its short term debts as they fall due. Note that this interpretation is fairly simplistic.
This ratio tells you of how easily your business can meet its debts. To calculate the Current Ratio for your business, simply divide your current assets by your current liabilities (the higher the ratio, the better for your business!).