Current Ratio
Current assets divided by current liabilities.
The current ratio is a liquidity metric that measures a company's ability to cover short-term obligations with short-term assets. A ratio above 1.0 indicates more current assets than liabilities. Extremely high ratios may suggest inefficient use of working capital.
Formula
Related Terms
Debt/Equity Ratio
Total debt divided by shareholders' equity.
Market Capitalization
Share price multiplied by shares outstanding — the total equity value.
Enterprise Value (EV)
Market cap plus net debt — the total acquisition value of the business.
P/E Ratio
Share price divided by earnings per share — how much you pay per dollar of profit.
EV/EBITDA
Enterprise value divided by EBITDA — a capital-structure-neutral valuation metric.
EV/FCF
Enterprise value divided by free cash flow (TTM).