A ratio analysis compares a company's financial data for the purpose of identifying a current profit trend or providing context to make a business decision. An accountant or financial analyst ...

Financial ratios are an indicator of health for any business. They may seem esoteric, but to lenders and investors they tell the true story of a company's financial strength and ability to weather an ...

A good assessment of a company’s liquidity is important because a decline in liquidity leads to a greater risk of bankruptcy. FASB describes liquidity as reflecting “an asset’s or liability’s nearness ...

Current ratio measures short-term asset coverage of liabilities, guiding investment decisions. Compare a company's current ratio across years and versus peers to assess financial health. Seasonal ...

Liquidity ratios are key financial ratios used by internal and external analysts to gauge a company's liquidity, which represents its capacity to pay its existing short-term liabilities if it needs to ...

There’s no universal safe or danger level. Ideal current ratios vary by industry. A current ratio of 1.0 means the company has $1 in current assets for every $1 in current liabilities. A ratio below 1 ...

Claire Boyte-White is the lead writer for NapkinFinance.com, co-author of I Am Net Worthy, and an Investopedia contributor. Claire's expertise lies in corporate finance & accounting, mutual funds, ...

“Cash is King” is more than just a cliché; it is a fundamental truth. A company can report billions in profit on its income statement, yet if it runs out of the actual money needed to pay its short ...