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. Because the current ratio compares short-term ...

An asset constitutes anything that holds monetary value, whether current or future, to a person or organization. Businesses, governments and non-profits all own assets. So do many people. An asset is ...

Business leaders love to talk about revenues, net profits and assets. After all, those are all positive numbers on a balance sheet that can make a company look great. They are also how a company ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Charlene Rhinehart is a CPA , CFE, chair of ...

Daniel Liberto is a journalist with over 10 years of experience working with publications such as the Financial Times, The Independent, and Investors Chronicle. Investopedia / Candra Huff Other ...

Strong accounting practices are key to managing your small business. A major part of accounting is understanding a balance sheet, the part of your financial statements that show your net worth. To ...

A current ratio is an accounting formula that defines a company's ability to meet its immediate and short-term obligations. The current ratio, sometimes called the liquidity ratio or the working ...

Company assets include both quickly sellable items and long-term holdings like real estate. Liabilities represent all debts, ranging from short-term bills to long-term loans. Stockholders' equity ...

Working capital measures financial health by subtracting current liabilities from assets. A current ratio above 1 indicates adequate working capital, reflecting company stability. Excessive working ...