What is my current ratio?
Enter current assets and current liabilities from a balance sheet to see the current ratio. Add cash, short-term investments and accounts receivable to see the quick ratio as well.
- Current ratio
- 2
Current assets of $200,000.00 against current liabilities of $100,000.00 give a current ratio of 2.
- Quick ratio
- 1.6
- Quick assets
- $160,000.00
Current ratio: 2. Current assets of $200,000.00 against current liabilities of $100,000.00 give a current ratio of 2.
The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use
How to calculate
Computes the current ratio, current assets ÷ current liabilities, and the quick ratio from cash, short-term investments and receivables.
Example with the default inputs (Current assets $200,000.00, Current liabilities $100,000.00, Cash and cash equivalents $110,000.00, Short-term investments $20,000.00, Accounts receivable $30,000.00): Current assets of $200,000.00 against current liabilities of $100,000.00 give a current ratio of 2.
Method: Current ratio = current assets ÷ current liabilities. Quick assets = cash + short-term investments + accounts receivable. Quick ratio = quick assets ÷ current liabilities.
- All amounts come from the same balance sheet; quick assets are part of current assets.
- Arithmetic is exact on the typed decimals; the ratios show to 2 decimals, halves up.
Worked examples
Each example is checked against the calculator on every build.
- Current assets $200,000.00, Current liabilities $100,000.00, Cash and cash equivalents $110,000.00, Short-term investments $20,000.00, Accounts receivable $30,000.00 gives Current ratio 2, Quick ratio 1.6, Quick assets $160,000.00.Source: OpenStax, Principles of Finance, 6.3 Liquidity Ratios (current ratio = current assets ÷ current liabilities; quick ratio = (cash + short-term investments + accounts receivable) ÷ current liabilities; Clear Lake Sporting Goods). https://openstax.org/books/principles-finance/pages/6-3-liquidity-ratios: 200,000 ÷ 100,000 = 2
- Current assets $48,000.00, Current liabilities $32,000.00, Cash and cash equivalents $9,000.00, Accounts receivable $15,000.00 gives Current ratio 1.5, Quick ratio 0.75.Source: OpenStax, Principles of Finance, 6.3 Liquidity Ratios (current ratio = current assets ÷ current liabilities; quick ratio = (cash + short-term investments + accounts receivable) ÷ current liabilities; Clear Lake Sporting Goods). https://openstax.org/books/principles-finance/pages/6-3-liquidity-ratios
- Current assets $85,000.00, Current liabilities $120,000.00 gives Current ratio 0.708333.Source: OpenStax, Principles of Finance, 6.3 Liquidity Ratios (current ratio = current assets ÷ current liabilities; quick ratio = (cash + short-term investments + accounts receivable) ÷ current liabilities; Clear Lake Sporting Goods). https://openstax.org/books/principles-finance/pages/6-3-liquidity-ratios
How it works
- Current ratio = current assets ÷ current liabilities
- Quick assets = cash and cash equivalents + short-term investments + accounts receivable
- Quick ratio = quick assets ÷ current liabilities
Rules:
- Current liabilities must be more than $0. Every other amount is $0 or more, at most $1 quadrillion.
- The quick ratio shows only when at least one of cash, short-term investments or accounts receivable is entered. An empty box among the three counts as $0.
- Quick assets larger than current assets give no answer, because they are part of current assets.
- A ratio too large or too small to show as a number gives no answer.
- The arithmetic is exact on the decimals you type. Both ratios show to 2 decimals, with halves rounded up.
Assumptions
- All amounts come from the same balance sheet date.
Worked examples by hand
Clear Lake Sporting Goods. Current assets $200,000, current liabilities $100,000, cash $110,000, short-term investments $20,000, accounts receivable $30,000. Current ratio = 200,000 ÷ 100,000 = 2. Quick assets = $160,000. Quick ratio = 160,000 ÷ 100,000 = 1.6.
A shop heavy in inventory. Current assets $48,000, current liabilities $32,000, cash $9,000, accounts receivable $15,000, no short-term investments. Current ratio = 48,000 ÷ 32,000 = 1.5. Quick ratio = 24,000 ÷ 32,000 = 0.75.
Current ratio only. Current assets $85,000, current liabilities $120,000. Current ratio = 85,000 ÷ 120,000 = 0.71 (0.7083…).
Other questions people ask
What is the current ratio?
The current ratio compares what a company expects to turn into cash within a year (current assets) with what it must pay within a year (current liabilities). A ratio of 2 means $2 of current assets for each $1 due.
How do I calculate the current ratio?
Divide current assets by current liabilities. Clear Lake Sporting Goods had $200,000 of current assets and $100,000 of current liabilities, so its current ratio was 2, often written 2:1.
What is the quick ratio?
The quick ratio, also called the acid test, counts only the current assets that turn into cash fastest: cash, short-term investments and accounts receivable. It leaves out inventory and prepaid expenses. Clear Lake's quick ratio was (110,000 + 20,000 + 30,000) ÷ 100,000 = 1.6.
What is a good current ratio?
A ratio above 1 means current assets cover the debts due within a year. What counts as healthy depends on the industry: a grocer that sells stock fast can run lower than a maker that holds stock for months. Compare with similar companies.
Why can the quick ratio be much lower than the current ratio?
When a large part of current assets is inventory. A shop with $48,000 of current assets, of which only $24,000 is cash and receivables, and $32,000 of current liabilities has a current ratio of 1.5 but a quick ratio of 0.75.
Why do I get no answer when quick assets are large?
Cash, short-term investments and receivables are part of current assets. If they add up to more than the current assets you typed, one of the numbers is wrong, so the calculator gives no answer.