Current ratio is a mathematical formulas which make use of a company's financial information for comparison purposes
What is current ratio?
The current ratio is the one that measures a company's ability to cover its short-term obligations with its current assets. It indicate whether or not a company is able to meet its short term financial obligations.
Current ratio is computed by dividing the current asset over current liability. It compare a company's financial information.
Hence, indicators created by mathematical formulas using a company's financial information for comparison purposes are called current ratio.
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