Understand what the current ratio measures, why it matters, and how to use it to assess and improve short-term liquidity.

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. It’s important to keep in mind that the current ...

When a business offers credit to a favorite customer, loyalty and the desire to make the sale often play roles in the move. But one thing the financial crisis taught American businesses is that it’s ...