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What is current ratio?
The current ratio is liquidity ratio that express the current assets are sufficient to pay off the current liabilities within one year. It indicates to the investors and analysts how well a company maximize the current assets to fulfill its Current debt and other payables.
Current ratio helps to manage liquidity position in the company. The current ratio also known as "working capital" ratio that establishes a relation between the current assets and current liabilities of the company.
It also shows the short term financial position of the company. The higher the outcome, the better the financial performance of the company.
