# What is my current ratio?

Computes the current ratio, current assets ÷ current liabilities, and the quick ratio from cash, short-term investments and receivables.

- Page: https://www.acalculator.org/finance/current-ratio-calculator
- JSON spec: https://www.acalculator.org/finance/current-ratio-calculator.json
- Version: 57acd45afd56

## Default answer

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.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| ca | Current assets | Cash, receivables, inventory and other assets expected to turn into cash within a year. |
| cl | Current liabilities | Bills, wages, short-term loans and other debts due within a year. |
| cash | Cash and cash equivalents | Cash in hand and in the bank, for the quick ratio. Optional. |
| sti | Short-term investments | Marketable securities that can be sold quickly, for the quick ratio. Optional. |
| ar | Accounts receivable | Money customers owe for sales on credit, for the quick ratio. Optional. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| current | Current ratio | Current assets ÷ current liabilities. |
| quick | Quick ratio | (Cash + short-term investments + accounts receivable) ÷ current liabilities. |
| quickAssets | Quick assets | Cash + short-term investments + accounts receivable. |

## Method

Current ratio = current assets ÷ current liabilities. Quick assets = cash + short-term investments + accounts receivable. Quick ratio = quick assets ÷ current liabilities.

## Assumptions

- 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

1. ca = $200,000.00, cl = $100,000.00, cash = $110,000.00, sti = $20,000.00, ar = $30,000.00 gives current = 2, quick = 1.6, quickAssets = $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.
2. ca = $48,000.00, cl = $32,000.00, cash = $9,000.00, ar = $15,000.00 gives current = 1.5, quick = 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.
3. ca = $85,000.00, cl = $120,000.00 gives current = 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.

## FAQ

### 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.

## Sources

- OpenStax, Principles of Finance, 6.3 Liquidity Ratios: current ratio = current assets ÷ current liabilities; quick ratio = (cash + short-term investments + accounts receivable) ÷ current liabilities, without inventory and prepaid expenses; Clear Lake Sporting Goods (2 and 1.6). https://openstax.org/books/principles-finance/pages/6-3-liquidity-ratios (retrieved 2026-10-18)
- U.S. Securities and Exchange Commission, Beginners' Guide to Financial Statements: current assets are expected to turn into cash within one year; current liabilities are due within the year. https://www.sec.gov/about/reports-publications/beginners-guide-financial-statements (retrieved 2026-10-18)