MANAGEMENT

Detailed explanation-1: -Calculating the current ratio is very straightforward: Simply divide the company’s current assets by its current liabilities.

Detailed explanation-2: -The current ratio is a metric used by accountants and finance professionals to understand a company’s financial health at any given moment. This ratio works by comparing a company’s current assets (assets that are easily converted to cash) to current liabilities (money owed to lenders and clients).

Detailed explanation-3: -Current ratio is a comparison of current assets to current liabilities, calculated by dividing your current assets by your current liabilities. Potential creditors use the current ratio to measure a company’s liquidity or ability to pay off short-term debts.

Detailed explanation-4: -Formula of Current ratio is CA/CL (Current assets/Current liabilities.