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How well can current assets cover current liabilities? Reviewed by Amy Drury The acid-test ratio (ATR), also commonly known as the quick ratio, measures the liquidity of a company by calculating how ...

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 ...

Current liabilities include short-term financial obligations due within a year. Investors should monitor companies' current ratios to assess financial strength. A current ratio above 1 indicates a ...

The quick ratio, also known as the acid-test ratio, measures a company's ability to pay off its current debt. Current debt includes any liabilities coming due within a year, like accounts payable and ...