Measures a company’s ability to cover its short-term liabilities with its short-term assets.

What it Measures ?

Can we pay off our short-term dues with our short-term assets?

Relevant StakeHolders 

Finance Manager, Treasury Team

In-depth Use Case / Real-world Example

Current Ratio is calculated by dividing current assets by current liabilities. For example, if a company has ₹500,000 in current assets and ₹400,000 in current liabilities, the current ratio is 1.25. A ratio above 1 indicates the company can cover its short-term obligations, but a high ratio may suggest inefficiency in asset utilization.