Current Ratio
Do you know and regularly calculate your organization’s Current Ratio?
Working Capital
If you haven’t already, I encourage you to read the article: Working Capital.
In that article, we explore this important concept. This is a good “companion” article to this article.
If you recall, Working Capital is defined as Current Assets minus Current Liabilities.
The Key is Current
As you will see, the key word from above is Current. Meaning, Current Assets and Current Liabilities.
So, by definition, the Current Ratio is equal to ...
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