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The current ratio is a liquidity ratio that measures whether a firm has enough resources to meet its short-term obligations. It compares a firm's current assets to its current liabilities, and is expressed as follows:-. The current ratio is an indication of a firm's liquidity. Acceptable current ratios vary from industry to industry. [1]
The formula is: Current ratio: Current assets / Current liabilities ... What is a good current ratio? The ideal current ratio varies by industry. However, an acceptable range for the current ratio ...
A financial ratio or accounting ratio states the relative magnitude of two selected numerical values taken from an enterprise's financial statements. Often used in accounting, there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization. Financial ratios may be used by managers ...
v. t. e. In accounting, a current asset is any asset which can reasonably be expected to be sold, consumed, or exhausted through the normal operations of a business within the current fiscal year or operating cycle or financial year (whichever period is longer). Typical current assets include cash, cash equivalents, short-term investments which ...
It is defined as the ratio between quickly available or liquid assets and current liabilities. Quick assets are current assets that can presumably be quickly converted to cash at close to their book values. A normal liquid ratio is considered to be 1:1. A company with a quick ratio of less than 1 cannot currently fully pay back its current ...
The formula describing a current divider is similar in form to that for the voltage divider. However, the ratio describing current division places the impedance of the considered branches in the denominator, unlike voltage division, where the considered impedance is in the numerator. This is because in current dividers, total energy expended is ...
An electric current is a flow of charged particles, [1] [2] [3] such as electrons or ions, moving through an electrical conductor or space. It is defined as the net rate of flow of electric charge through a surface.
Ohm's law states that the electric current through a conductor between two points is directly proportional to the voltage across the two points. Introducing the constant of proportionality, the resistance, [1] one arrives at the three mathematical equations used to describe this relationship: [2] where I is the current through the conductor, V ...