GENERAL KNOWLEDGE

Detailed explanation-1: -The current ratio is a liquidity ratio that measures a company’s ability to pay short-term obligations or those due within one year. It tells investors and analysts how a company can maximize the current assets on its balance sheet to satisfy its current debt and other payables.

Detailed explanation-2: -Current Ratio Definition This ratio compares a company’s current assets to its current liabilities, testing whether it sustainably balances assets, financing, and liabilities. Typically, the current ratio is used as a general metric of financial health since it shows a company’s ability to pay off short-term debts.

Detailed explanation-3: -Current ratio, also called the working capital ratio, is a liquidity ratio used to measure a business’ ability to meet its short-term liabilities. It compares the firm’s current assets to its current liabilities.