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Sunday, August 14, 2011

How to Calculate Current Ratio

Current ratio (or working capital ratio) is a financial ratio that measures whether a firm has enough resources (liquid assets) to pay its debts (current liabilities) within one year. The ratio is calculated as follows:

Current ratio = Current Assets / Current Liabilities

Learn how to calculate current ratio with the following example:

Thomas Ltd has the following data as at 31 December 2010:


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