The Current Ratio: A Key Metric For Investing In Small Cap Stocks

The current ratio is a financial ratio that measures a company's ability to pay its short-term debts with its current assets. It is calculated by dividing current assets by current liabilities. A current ratio of 1.0 means that a company has enough current assets to cover its current liabilities one-to-one. A current ratio of 2.0 means that a company has twice as many current assets as current liabilities. The current ratio is an important metric for investors because it provides a quick...