Current Ratio reflects the ratio of the value of short-term assets to the value of the company's short-term liabilities.
Current Ratio = Current Assets / Current Liabilities
This ratio measures the capability of a business to meet its short-term obligations that are due within a year.
The higher the value of the current liquidity indicator, the higher the liquidity of the company's assets. The optimal value is considered to be a coefficient value of 2 or more. However, for some industries, a decrease in the indicator is allowed, so investors compare the value of the indicator with industry average values.
However, when evaluating a company's liquidity, the current ratio alone doesn't determine whether it's a good investment or not. It's therefore important to consider other financial ratios in your analysis.
According to Ranks methodology, this indicator is analyzed in the Financial position block and used along with other indicators to calculate the score.
Aghasi Khanjyan street, 50, Yerevan, Armenia, 0025
Marr street, 16, apt. 5, Yerevan, Armenia, 0079
Loutrakiou, 5, CHARA VENEZIA BUILDING, 1st floor, Office 101, Nicosia, Cyprus, 2027
Zolotukhin & Partners corporation LTD
LLC "Ranks AAA" does not provide brokerage services and does not take funds into trust management.
Legal Entity Code:53125283 Insurer code: 43715106 registered in Ministry of Justice Republic of Armenia.
© «RANKS» 2022. All rights reserved