Current Ratio
Whether a company has enough short-term assets to cover its short-term liabilities.
Current Ratio = Current Assets ÷ Current Liabilities
Quick Current Ratio calculator
₹Cr
₹Cr
Current Ratio
1.67x
Current Ratio = Current Assets ÷ Current Liabilities
What is the Current Ratio?
The current ratio measures short-term liquidity — a company’s ability to pay bills due within a year using assets convertible to cash within a year.
How to interpret it
A ratio above 1 means current assets exceed current liabilities. Too low risks a cash crunch; too high can mean idle, inefficiently deployed capital.
What’s a good Current Ratio?
1.5–3
Healthy
1–1.5
Tight
< 1
Stressed
Around 1.5–2 is healthy for most businesses. Below 1 warrants scrutiny; well above 3 may signal unproductive assets.
Common mistakes
- Assuming higher is always better — excess current assets can be lazy capital.
- Ignoring inventory quality — the quick ratio strips out inventory for a stricter test.
See it on a real stock
This ratio computed for any listed company.
Related ratios
All financial ratios →For educational purposes only, not investment advice. Consult a SEBI-registered advisor before investing.